When making your decision whether or not to geta Reverse Mortgage, take a look forward 5-10 years in time and imagine how you want your life to be.
If you make no changes at all will your life be what you imagined, and more importantly is that ok with you?
Ask yourself exactly what about the program would make you say no even if it will change your life.
Is it the upfront fees? If you currently have a mortgage payment, what is the total you will pay in 1 year? Will that out of pocket payment be more, less, or equal to the upfront fees? Is it the compounded interest? And what exactly bothers you about that? The fact that you are paying compounded interest?
If so, then make interest only payments. Just because you are not required to make a payment on a Reverse Mortgage doesn’t mean you can’t. In any amount, at any time.
This is a very flexible product, much more so than a traditional loan.
Whether upfront fees or compound interest remember the equity growth of a property is compounded as well. In 1-2 years those fees and interest may be a wash.
Is it the fact that you cannot get enough equity out, so you decide to get a traditional loan?
Will you qualify for the loan and will you be able to handle the increase in the payment?
Is it the increasing loan balance and fear of having to sell one day and not having enough eq uity left over?
For instance if you are now making a $1000 mortgage payment, but just need another $500 per month in cash flow then pay $500 toward the Reverse Mortgage (put the other $500 in your pocket) to keep the balance from increasing as much, and if you chose the Line-of Credit option then any payment made to interest is also applied to your credit line!
If it is indeed access to more equity then Plan B may work for you.
Lastly, if it is the legacy that you want to leave your family this can still happen when planned properly.
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