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Reverse mortgage for second home?

By Terry Savage on August 08, 2017 | Housing / Real Estate

Hi Terry. Could a reverse mortgage be used for a second residence? We have most of our extended family here in the Chicago area. But our adult children live in California. We are 62 and may be grandparents within the next couple years. I was wondering if it makes any sense or if it even possible to take out a reverse mortgage on our current home to finance a second place in California. I would not expect our adult children to want our home when we pass away. Thanks for your input.

Terry Says

Yes, that is a growing and popular use of a RM -- especially if your current home is mortgage free, or has a low mortgage balance.  Just remember that you will still have to pay property taxes and insurance and upkeep on both homes!  If your budget allows for that, go right ahead.  I would, however, wait as long as possible to do that -- so you can get the largest amount of money from your current home.  You are eligible at age 62 -- but you might want to wait until those grandchildren are born.  Then calculate the cost of a hotel on visits vs the benefits of having a home near them!



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