Helping Seniors Make Informed Financial Choices

Some senior homeowners who have gone into a state of shock over what has happened to the value of their homes have put any consideration of a reverse mortgage on hold.  Is this a wise choice or a flawed strategy?

The answer all depends.  It is a wise decision for those who are emotionally and financially prepared to wait it out for another three to five years.  This is the time frame that is being offered up by most savvy financial and real estate professionals.  My personal observations of prior “home value valleys” is that once a bottom is achieved, and we are not there yet, the recovery always takes a half a decade.

If, after some serious soul searching and a thoughtful objective analysis of your current financial health, you may accurately conclude that waiting is not in your best interests, I encourage you to talk to a reverse mortgage professional as soon as possible.

I understand it is discouraging to settle for half a loaf when just eighteen months ago the whole loaf would have been yours for the asking.  So, if eliminating debt or receiving additional income would provide no added peace of mind nor do little to improve your ability to enjoy life more fully, you are very blessed; and, by all means wait until a reverse mortgage would provide measurable value to you and those you love.  However, this is not where the majority of homeowners 62 and over now find themselves.

Many experience frequent gaps between their income and outgo.  Even those who have the funds to “make it through” do not have the discretionary income to enjoy life to the fullest extent possible.  It is this group that needs to re-think the wisdom of waiting.

 

If you have chosen to put the full enjoyment of life on hold because you feel that starting a reverse mortgage when values are down is a bad call, that is clearly your call and I respect that.  But, please, understand that this is a decision you must live with for the next three to four years.

It does not mean that it is a bad decision but it is a long term one for certain.

Remember, a reverse mortgage, just like any other mortgage, can be refinanced when real estate values once more attain levels that will make us all feel more secure.

I have been forced to think about this a lot of late.  It seems that once or twice a week I receive a call from a client who, after a year or two of consideration, is now in a position of needing a reverse mortgage.  Sadly, some have deliberated too long and their new value no longer accommodates what they were originally seeking to achieve.  In many of these cases, I feel as though I have let them down.

The overriding purpose of this article is to avoid letting any of you down who are going through the process of “thinking about it.”