Is a Reverse Mortgage a good option for my parents?
By Tim McWhite - January 12, 2023
Many middle-aged adults are asking the same question when it comes to their parents. Real estate value has increased dramatically in most locations over the last ten years, and seniors are now living in very expensive homes.
With these expensive homes comes higher property taxes, energy bills, HOAs, etc. The cost of everyday items has also increased; eggs, gas, milk, and insurance to name a few. These higher costs have placed an additional burden on many seniors' already tight fixed budget.
A Reverse Mortgage or HECM (Home Equity Conversion Mortgage) allows seniors (62 and older) the ability to access the equity in their home to be used as income. There are different types of Reverse Mortgages and each person's situation is different, but if your parent(s) are struggling with their budget, a Reverse Mortgage might be a good fit.
A recent client was short $282 on her monthly budget and she needed two new teeth. She already had cut back on all leisure expenses and was only eating once a day. I met with her and her son in her home and explained the benefits and drawbacks of these types of mortgages. They ended up going with a HECM that allows her access to money as she needs it versus taking it all in one lump sum. She has since replaced her two teeth and is back to eating three times a day.
Peak Financial specializes in Reverse Mortgages or HECMs. If your parent(s) are having to make cuts to their budget/lifestyle, a Reverse Mortgage may be a good way to supplement their income.