What You Can Do if You Already Have a Reverse Mortgage
Article by R. Joseph Ritter, Jr. CFP® EA
If you already have a reverse mortgage and would like to learn about alternatives, the following are a few practical tips:
- Take steps to limit the amounts you take from the reverse mortgage. You cannot stop the interest on amounts you have already received or that have been financed unless you pay the mortgage off, however, you can reduce future interest by not taking any further money against your home.
- Consider selling your home to terminate the reverse mortgage and taking the remaining equity while it is still available. Unless you have other assets available, selling your home is probably the only way to terminate a reverse mortgage. This option is probably only best if you have substantial equity remaining in your home. If you do not have equity in your home, then this option may not make sense.
- Speak to a professional financial planner to request an analysis of the suitability of the reverse mortgage and whether alternatives may still be available
- If your reverse mortgage is in default or about to go in default due to non-payment of property taxes, insurance and/or maintenance/upkeep, you can contact your state’s Department of Elder Affairs to inquire if there is any assistance available. In Florida, for example, the state, in cooperation with Fannie Mae and the U.S. Department of Treasury, very recently launched the Elderly Mortgage Assistance Program (ELMORE) which provides monetary assistance to homeowners unable to pay property taxes, insurance and/or maintenance.