The L.A. Times published an article this week covering some alternatives to taking out a reverse mortgage loan. The article, titled, “Elder homeowners might want to consider reverse mortgage alternatives,” offers options it calls alternatives to reverse mortgages including deferred payment loans (DPLs), property tax deferral (PTD) loans and Supplemental Security Income (SSI) benefits, and outlines several housing options.
The article doesn’t address pros and/or cons of reverse mortgages, instead it offers additional options.
“Reverse mortgages may very well be a good choice for some seniors who need to tap into equity they have in their homes,” the article states, before outlining the alternatives. “But there are other options elder owners might also want to consider.”
For DPLs, the L.A. Times writes, generally there are no origination fees and insurance premiums and closing costs are low, as are interest rates. As for a PTD loan, the article states, “Generally, it provides annual advances that can be used only to pay your property taxes or a portion thereof. But no repayment is required for as long as you live in the house.” They are only available in some areas, however. For SSI benefits, the article explains, seniors may be eligible if their liquid resources total less than $3,000 for a couple or $2,000 for an individual.
For those who don’t qualify for a reverse mortgage or for whom reverse mortgages proceeds are not sufficient, the article suggests three housing alternatives: accessory apartments, ECHO cottages and sharing arrangements.
Read the L.A. Times article.
Written by Elizabeth Ecker