I'm a retiree, nearly 70, and would like some opinions regarding reverse mortgages. The rules have recently changed and I'm trying to determine the suitability to augment my retirement benefits. We have no children and our current home is appraised at $1.2 million.
I don't like them one bit. BUT that doesn't mean they are wrong for you. Define augment. If you are short of cash after SS/savings/investments, perhaps.
Any loan when the balance increases over time as interest on the loan and fees accumulate is fundamentally unfavorable. Plus as home equity is used, fewer assets are available - but I do realize this is minimized because you have no heirs. Fees are higher than with a traditional mortgage. The loan becomes due and must be repaid when some type of specified “maturity event” occurs, such as the last surviving borrower (or non-borrowing spouse meeting certain conditions) passes away, the home is no longer the borrower’s principal residence, or the borrower vacates the property for more than 12 months. The loan will become due if the homeowner fails to pay their property taxes or homeowners insurance, or fails to maintain the property (which typically applies to any mortgage). I am not claiming to be an expert, just my opinion. Not sure if the rule changes impact these things.
Why would you not do a reverse mortgage? You can not take the home with you, just enjoy the money while you still have your health. Unless you have some other relatives, neighbor or charity that you would like to rain some money on upon your demise - not a bad choice either, just a choice.