Non Reverse Mortgage Solutions
Alternatives to a reverse mortgage: If you’re under the age of 62, a reverse mortgage is not available to you. Even if you do qualify for a reverse mortgage, it may not be the right option for you. Before making your decision, take a look at some of the alternatives to a reverse mortgage that are available.
1. Refinancing Your Home - Refinancing your home could decrease your monthly payments to a lower amount. It may lower your interest rates, and it might even get you some cash back. With this option, your heirs can inherit the property.
2. A Home Equity Loan - Like many loans, a Home Equity Loan gives you access to your home’s equity. Payment for a Home Equity Loan can be given in lump sum, and is repaid with monthly payments. Fees on a Home Equity Loan are typically lower than on a reverse mortgage.
3. Home Equity Line of Credit - This type of loan, a HELOC, works as a line of credit that you can draw from when needed. Repayment for this is a monthly payment based on the interest and the amount borrowed. With a HELOC, fees and interest rates can be lower than on a reverse mortgage. The downside may be that a limited amount of equity exists which constrains the new HELOC limit or loan size. The payments will also typically increase after the draw period concludes and the HELOC amortizes so that the loan will pay down and ultimately pay off.
4. Consider renting out your home - Renting your home out to vacationers or to monthly renters can be a great way to increase income. Home owners often use website such as airbandb or VRBO links?
5. Selling and Downsizing - If finances are tight, this might be the most obvious option. If you have equity in your home, it is likely you will get more of it from selling than from a reverse mortgage. Proceeds from selling can go to buying or renting a more affordable home.