Reverse mortgages let older homeowners cash out their home equity without selling their residences or taking on debt payments. However, the loans have costs and eligibility restrictions that can cause other solutions to be more favorable.
If you’re a homeowner thinking of taking out a reverse mortgage, here are the seven best alternatives to consider using instead.
Sell Your Home
Senior homeowners often become interested in reverse mortgages when they have trouble affording their living expenses. These loans can supplement your retirement income with recurring monthly payments or generate a large lump sum upfront.
However, a reverse mortgage borrower must stay in the same property indefinitely. If you’re interested in ever moving to a new location, selling your home may be a better way to liquidate the asset for several reasons.
First, assuming you can find a buyer, selling your home converts your equity into cash more efficiently than a reverse mortgage. The closing costs tend to be lower, so you get to keep more of your equity.
