For senior homeowners who prefer to age in place rather than downsize into a smaller, more manageable residence in retirement, a reverse mortgage is one option. But consumers should be aware not everyone may qualify for these loans, says a recent article from AARP.
The central focus of the AARP article offers insight on what to consider when making the decision to sell one’s home in retirement, with the option of using a reverse mortgage framed toward the end of the piece as another possible avenue for older homeowners looking to stay in their homes.
As people age, their homes may no longer suit their lifestyles. And while this could motivate the decision to sell and relocate to a more maintenance-free residence, there is a sentimental value that may be hard to overcome for some homeowners.
“The tie to one’s home is the hardest thing to understand from the outside. It’s a very personal decision,” says Rodney Harrell, a housing expert with the AARP Public Policy Institute, in the article. “Some people may be reluctant to move from a house where they raised children and created decades of memories. On the other hand, the cul-de-sac that provided a safe place for kids may be isolating if driving becomes a challenge.”
For homeowners who are adamant about remaining in their homes, AARP suggests a reverse mortgage is one option that can accommodate the desire to age in place.
While reverse mortgages allow people age 62 and older stay in their homes while drawing on the equity they have built over the years, AARP lists several cautions for these products.
“But be aware that a reverse mortgage is a complicated loan that can be expensive, and today fewer homeowners may be able to take advantage of this option,” AARP writes.
That could be because older homeowners today are carrying more mortgage and home equity loan debt than in the past, and they may not have enough equity to qualify for a reverse mortgage, said Lori Trawinski, director of banking and finance with the AARP Public Policy Institute, in the article.
Read the AARP article.
Written by Jason Oliva