Here is some advice on what to consider before taking a reverse mortgage from the AARP
Do you really need a reverse mortgage?
Financially these are expensive so you must be very careful when you consider this option.
Can you afford a reverse mortgage?
These loans are expensive and the amount you owe grows larger every month. Also, due to high up-front costs, these loans can be especially costly if you sell and move just a few years after taking one out.
Can you afford to start using up your home equity now?
The more you use now, the less you will have later, when you may need it more, for example to pay for future emergencies, health care needs, or everyday living expenses. If you are not facing a financial emergency now, then consider postponing a reverse mortgage.
Do you have less costly options instead of taking out a loan?
If you don’t, and if you could make the monthly repayments on a home equity loan or home equity line-of-credit, these alternatives are less costly than a reverse mortgage. Many state and local governments offer low-cost loans for paying your property costs and taxes or making home repairs. And you could consider the costs and benefits of selling your home and moving to a less expensive one.
Do you fully understand how these loans work?
Before considering one, you need to do your homework carefully and thoroughly.
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