Have you ever wondered what types of people get a reverse mortgage? There are many reasons why people get a reverse mortgage, but in general all borrowers must meet a few basic requirements. In order to obtain a reverse mortgage, a borrower must be at least 62 years old, either own their home outright or have significant equity in their home, live in their home and be able to continue to pay for insurance, taxes and maintenance on their home. That said, there are still many types of people that get a reverse mortgage within the overall group of homeowners that qualify to take out a reverse mortgage. Here are a few examples.
You Want to Spend Every Penny of Your Wealth
You've worked hard to earn your money during your lifetime, so you should get to enjoy spending it. Unfortunately, many seniors have a large part of their wealth locked up in home equity. If you want to live in your home for the rest of your life, but spend the money you worked hard to earn, you may consider taking out a reverse mortgage to access the equity you've built in your home.
You Want to Gift Money to Children or Grandchildren
Not everyone wants to spend every penny of their wealth before they die. At the same time, not everyone wants to wait until they pass away to pass some of their wealth on to their family. Some seniors take out a reverse mortgage and then gift money to their children to help pay for a down payment on a home or gift money to their grandchildren to help pay for college. Gifting money in this manner allows you to see first hand how your money helps your family accomplish some of life's biggest and most expensive milestones.
You Want to Renovate Your Home
Sometimes people take out reverse mortgages to help make their home a safer place as they grow older or simply to upgrade the aesthetics of their living space. If you've decided you're going to live in your current home for the rest of your life, you might as well make sure you can safely live in your home. The equity could help pay for the upgrades required to make a home wheelchair accessible so you never have to leave even if you end up having medical issues down the road. Alternatively, if you home is already accessible, you may want to upgrade the kitchen or bathrooms to a more updated look.
You Need to Pay a One Time Expense
Seniors may turn to a reverse mortgage when a one time expense pops up. Even if you make enough money to live a comfortable life in retirement, a large one time expense could easily change your overall financial picture. Taking out a reverse mortgage to cover a large one time expense could be an option to pay for the expense while maintaining your current lifestyle. However, you must be careful to realize that tapping your home equity through a reverse mortgage can only happen while you still have enough equity in your home. If your one time expense exhausts your equity, you won't be able to turn to it again if another one time expense pops up.
Get the Best Deal on a Reverse Mortgage
If you think you may be one of the types of people that get a reverse mortgage, make sure to get the best deal possible your reverse mortgage. To find the best deal, compare multiple reverse mortgage quotes and choose the one that best fits your needs and offers the overall lowest cost.