A good debate that causes a lot of discussion is how one handles a mortgage on their house. Do they continue to pay it off until it no longer exists? If for some reason, a financial setback requires them to re-finance the mortgage, is refinancing a good option?
There are a variety of mortgage payment options to choose from, and not everyone has the same choices. There is one option that is rarely spoken of called “Reverse Mortgages.” Reverse mortgages allow for the option to refinance whether you owe little to no money on the loan, and it also allows you to refinance your HECM (Home Equity Conversion Mortgage) if it applies.
There are a variety of benefits to reverse mortgages including tax free (typically on a case by case basis), no prepayment penalties, and no credit score/income requirements just to name a few.
Then there is a special opportunity specifically for senior’s age 62 or older labeled as “reverse for Purchase.” This option allows for an elderly person to purchase a new principal residence using loan proceeds from the reverse mortgage. Meaning, if one so chooses to purchase a new principal for a new or existing home, instead of coming “out of pocket” for the expenses, they can use the current amount left on the existing mortgage as if it is a loan to themselves.