Alternatives to a Reverse Mortgage
While there are many benefits of reverse mortgages, the truth is that a reverse mortgage may not be the best financial decision for everyone. At Citizens Reverse Mortgage, we believe in transparency and providing completed information to seniors. Therefore, there are some important alternatives to reverse mortgage loans that you should be aware of before making a final decision about whether it is right for you.
The main reasons to seek alternatives to reverse mortgage loans are:
- If your current mortgage is supportable enough that a refinancing agreement may be just as good for your needs
- If you want to pass the home onto heirs
- If you anticipate relocating to a new property or changing your living arrangement
There are three chief options that may provide alternatives to reverse mortgage agreements: refinancing, downsizing to a smaller property, and a sales-leaseback agreement with family members or heirs. To learn more about these alternatives, read more below.
If you would like to speak to one of our customer representatives about your alternatives to reverse mortgage agreements and for more help determining which solution is best for you, call Citizens Lending at (800) 447-4042.
#1: Just Get a Conventional Loan Refinancing
Refinancing as an alternative to reverse mortgage loans can be simple: you can simply refinance to lock in a lower interest rate, switch between variable and fixed rate mortgages, or switch lenders to a company that you think will give you better service.
These alternatives to reverse mortgage loans will still require a monthly payment, but if you have only a few years left on your conventional mortgage they may help lower your mortgage payment enough that it will be sufficient for your current and future needs.
#2: Trade in for a More Affordable House
Another alternative to reverse mortgage loans that allows you to access your home equity includes selling your house to downsize to a smaller/less expensive one. The new, smaller payments in a more manageable house can give you the additional financial breathing room that you need to enjoy a comfortable retirement.
However, this is one of the alternatives to reverse mortgages that is highly dependent on the current housing market. If your home value isn’t high enough, you may not be able to purchase a new home with enough money left over. In this case, you may consider using a reverse mortgage for purchase to make the process more affordable.
#3: Sales-Leaseback Agreement
It may not be the type of relationship that you are used to, but among the most popular alternatives to reverse mortgage loans include sales-leaseback agreements with heirs.
How this works is that you sell the house to one of your children, and then the adult child rents the house out to you while you remain in it. There are some tax advantages to this approach, and it gives you some additional flexibility if you anticipate wanting to vacate the property. However, it is important to consider your relationship with your children before settling on this alternative to reverse mortgage loans as the agreement can go sour quickly with family conflicts.
Learn More About Alternatives to Reverse Mortgage Loans
To talk to an expert about your alternatives to reverse mortgage agreements, call Citizens Lending Group at (800) 447-4042. You can also use our easy online contact form to learn more about reverse mortgage requirements and alternatives and for help deciding what options is right for you.
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Loans made or arranged pursuant to Real Estate Corporation License Endorsement #01814249, California Bureau of Real Estate (877) 373-4542. NMLS #1109984
These materials are not from HUD or FHA and were not approved by HUD or a government agency.