When to Use the Reverse Mortage as a Solution

By Spooni Vanrock

Reverse mortgages are becoming mainstream lately. Perhaps it's Robert Wagner, or maybe its life circumstance creeping up on today's seniors forcing them to use the reverse mortgage.

The reverse mortgage is an exceptable and real financial problem solver if it is used in the right circumstances.

However, it does not come without reasons to choose other options. Many customers ask me, "Is the reverse mortgage okay for me. Am I making the right choice?"

I'm always a little taken back when they ask me this question. I mean, afterall, I make money only when the loan goes through my company. If I weren't an honest guy I may be inclined to promote my best interests.

However, I'm a pretty honest cowboy and I answer back, "How long do you plan on staying in the home?" This is the most important thing to know.

I want to know because short reverse mortgages should be used only in dire emergencies. The cost of getting the loan for a short period is very high due to the closing costs involved.

What I'm looking for is the customer to say, "when I leave it will be with tag on my toe." Now that's my kind of customer! The longer the loan goes on the less the loan costs the customer on an annualized basis.

Regardless of each individual's unique situation the basic rule of thumb is to be in the home at least three years.

Being in the home for any length of time less than that would be prohibitively expensive, and i may suggest other financial alternatives.

Another important thing to consider is weighing income against the financial issue the reverse mortgage may solve.

For instance, some incomes can change to catch up to and solve an economic troublespot. Fixed incomes, on the other hand, usuallly cannot. The duration of the financial issue plays a role as well.

Here is your typical reverse mortgage customer... He plans on staying in the home at 3 years or longer. His income is fixed and can't change to meet his financial needs. The reverse mortgage makes sense for this man.

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Learn about the 5 major pitfalls of the Texas Reverse mortgage at this link. A wealth of information and specific answers to specific Texas reverse mortgage questions found at this link.