U.S. News Offers Four Alternatives to Reverse Mortgages

Although reverse mortgages tout the ability to age in place while also having access to some extra cash during retirement, U.S. News suggests four alternatives to seniors looking to access their home equity. 

Whether or not a reverse mortgage is a good fit depends largely on an individual’s particular financial situation and the article from U.S. News Money and Personal Finance suggests that other options may, or may not be, preferable to a reverse mortgage.

For homeowners who plan to stay in their residences for a “meaningful period of time,” U.S. news suggests refinancing one’s home can help free up some cash, that is, assuming interest rates are favorable. The home will remain as an asset for the homeowner and his/her heirs, however, that national average for closing costs can be expensive—up to $3,754 for a $200,000 loan, according to recent survey data.

Advertisement

Home equity loans or lines of credit also enable homeowners to access their home equity, however, borrowers are required to repay interest on the entire loan amount for home equity loans, whereas with line of credit option a borrower is only required to pay interest on the amount borrowed.  

Though both of these options can also preserve a borrower’s home as an asset for their heirs, failure to make the required payments puts the home at risk of foreclosure.

For those looking to downsize, selling the home to a third party also provides access to home value, which can be used to move into smaller domiciles like apartments or condominiums.

If retaining the home as an asset to be passed along to one’s heirs is important, the final suggestion provided by U.S. News is to sell the home to an adult child, or children. This option, like the others, also has its caveats. 

Read more at U.S. News

Written by Jason Oliva

Join the Conversation (10)

see all

This is a professional community. Please use discretion when posting a comment.

  • expensive—up to $3,754 for a $200,000 loan. Expense ? compared to finding my own investor??? For those looking to downsize, selling the home to a third party also provides access to home value, which can be used to move into smaller domiciles like apartments or condominiums. LOL I turn 62 next year my wife nixed that in 1st 30 seconds.Sell home to a relative……? One we don`t fight with? LOL

    Dude… Do a Hemingway for us PLEASE

  • expensive—up to $3,754 for a $200,000 loan. Expense ? compared to finding my own investor??? For those looking to downsize, selling the home to a third party also provides access to home value, which can be used to move into smaller domiciles like apartments or condominiums. LOL I turn 62 next year my wife nixed that in 1st 30 seconds.Sell home to a relative……? One we don`t fight with? LOL

    Dude… Do a Hemingway for us PLEASE

  • Very poorly written by someone who obviously does not understand the product.. Tell US News to have 10 seniors apply for a refi or home equity and see how mny get approved. I thought one of the reasons for a reverse mortgage was to increase monthly cash flow and eliminate monthly payments.The only option that makes sense is sell the home and downsize.

  • Very poorly written by someone who obviously does not understand the product.. Tell US News to have 10 seniors apply for a refi or home equity and see how mny get approved. I thought one of the reasons for a reverse mortgage was to increase monthly cash flow and eliminate monthly payments.The only option that makes sense is sell the home and downsize.

  • Is this too going to go unanswered by our industry? We need an industry response to every last one of these half witted, ill informed and irresponsible articles. These things take on the air of legitimacy if ignored.

  • Is this too going to go unanswered by our industry? We need an industry response to every last one of these half witted, ill informed and irresponsible articles. These things take on the air of legitimacy if ignored.

  • Really? This is a NEW article? This seems like just a re post of the same article that has been around for the past 5-6 years. These can be 4 alternatives to a Reverse Mortgage but lets take a look at them.
    refinancing: Well could work but what is your mortgage balance? What is your credit score? What is your income? Can you qualify? What are your new monthly payments and how does this help your cash-flow?
    HELOC- Could work as banks are starting to offer them again but like before, what is your mortgage balance? What is your income? Can you qualify? Now you have another payment so how does this help your retirement or cash-flow?
    Sell your home? Sure you can do that and then maybe instead of getting a mortgage on the new place or paying cash how about looking into a Reverse Mortgage Purchase? Let’s you keep some of the profit from selling your home. And last, sell the home to your kids and live in it rent free! Sign me up for that one!!!
    Was this originally written by Suzie Orman? Seriously, if you are going to write an article like this PLEASE put a little effort into it and be original!

  • Really? This is a NEW article? This seems like just a re post of the same article that has been around for the past 5-6 years. These can be 4 alternatives to a Reverse Mortgage but lets take a look at them.
    refinancing: Well could work but what is your mortgage balance? What is your credit score? What is your income? Can you qualify? What are your new monthly payments and how does this help your cash-flow?
    HELOC- Could work as banks are starting to offer them again but like before, what is your mortgage balance? What is your income? Can you qualify? Now you have another payment so how does this help your retirement or cash-flow?
    Sell your home? Sure you can do that and then maybe instead of getting a mortgage on the new place or paying cash how about looking into a Reverse Mortgage Purchase? Let’s you keep some of the profit from selling your home. And last, sell the home to your kids and live in it rent free! Sign me up for that one!!!
    Was this originally written by Suzie Orman? Seriously, if you are going to write an article like this PLEASE put a little effort into it and be original!

string(99) "https://reversemortgagedaily.com/2014/04/29/u-s-news-offers-four-alternatives-to-reverse-mortgages/"

Share your opinion