There was a recent news article published online that discussed the five top threats to comfortable retirement and the things that seniors can do to lessen the damage of those threats. One of the five threats was the declining value of the home which impacts seniors who may have planned on using a reverse mortgage to assist them in funding their retirement.
The problem is that home equity for the reverse mortgage is based in part on the current value of the home. With home values declining, seniors may find that they have less money available to them than they had expected to have in the form of home equity through the reverse home mortgage loan.
The advice that is given to combat this is to try to remain in the home and utilize other sources of income until home values rise again. It is also noted that people who have owned their homes for at least a decade may find that they still have sufficient home equity to not have to worry much about this particular problem.
Question of the Day: How do declining home prices impact the ability of the reverse home mortgage to aid seniors in retirement?
