What about Reverse Mortgages for Financing Retirement?

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For many people approaching retirement, their major financial asset is the equity in the home they own. One way to tap that equity if needed is to sell the home and downsize to a smaller home or rent. When individuals wish to stay in their home but need to tap their equity without having monthly loan payments, a reverse mortgage may be a sound option in the right circumstances.

The Reverse Mortgages pages from AARP present a series of articles that cover the basics and many other issues related to reverse mortgages. This is a good place to begin educating yourself. For more in-depth information, download AARP’s 51-page booklet, Home Made Money: A Consumer’s Guide to Reverse Mortgages (a pdf file).

Reverse Mortgages: Get the Facts Before Cashing In On Your Home's Equity from the Federal Trade Commission provides some tips and cautions for what’s sound and what may be potential dangers to your finances in reverse mortgage options.

Guarding the Golden Years: Reverse Mortgages from Consumers Union offers a brief overview and a checklist to help you determine when a reverse mortgage might be good and when not.

At reversemortgage.org you’ll find consumer material on different types of reverse mortgages prepared by the National Reverse Mortgage Lenders Association, an industry trade group. The site is informative, but keep in mind that it is presented from the lenders’ point-of-view and with marketing as one objective.

 

Prepared for Corning Credit Union by Remar Sutton & Associates, May 2005. Reviewed and updated May 2007. All rights reserved.

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