Here’s a link to an article I wrote explaining Reverse Mortgages. But this is not a decision to be made without some real planning.
You need to be able to pay taxes and insurance and general upkeep on your home – -in exchange for a monthly check as long as you live there. It worked well for my father who lived in his condo until age 95, when he died.
But what if you need to move to assisted living? The house would be sold and the amount you borrowed, plus interest and fees, will be subtracted from the sales price. And while you can never owe more than what the lender sells the house for, you might wind up with NO money if you live there long enough?
Do you have children — and will this take away their inheritance? It could. My family decided we wanted Dad to live in his condo, enjoy the ocean view, and didn’t care about inheriting it. He lived there so long, and took so much money out, that the lender lost money on the deal when they sold the condo in a down market!
Reverse mortgages require independent counseling on all these issues, and I believe AARP provides this service. Yes, it’s tempting to get a check a month as long as you live there — but you have to work out the numbers to see if it’s enough to keep paying the annual costs of the home — AND to make sure you have other assets or insurance if you need home healthcare.