Alternatives to a Reverse MortgageAs you know from the other articles on our site, we view a reverse mortgage as a terrible financial product. So, what are the alternatives to a reverse mortgage? Alternatives In today's retirement world, many people are turning to the conventional reverse mortgage. The typical buyer of a reverse mortgage is usually house rich and cash poor. That is to say, that they have income, but it is fixed and they are usually overburdened by inflation. Their choices are to sell the house and live in an apartment or other less desirable environment, or mortgage the house and have a higher payment. Another option is to enter into a reverse mortgage that allows the homeowner to get either cash or monthly income from the property without any monthly payments. In some cases, the reverse mortgage actually pays off an existing first trust deed, along with the new income, at absolutely no cost to the borrower. Reverse Mortgage Alternatives Video So what is wrong with this picture? It seems just too good to be true and it is. As reality sets in, the reverse mortgage comes with a very high cost to set up, sometimes many thousands of dollars. It also has a very high underlying rate of interest, again sometimes in excess of 9% in our present environment. The limitations set by government are $368,000 maximum loan or 50% of the loan to value of the home, whichever is less. Don't despair, there are alternatives, and some very attractive ones. By looking at a standard type of loan, such as an interest only loan, we can get the money out of the house at a reasonable repayment schedule. We do not faced with the restriction of $368,000 or 50% loan to value. Here, you set your own limits. Reverse Mortgage Alternatives Video Once you have the cash in hand, it is vital that it be managed to maximize your monthly income while limiting risk. Many have traditionally used an equity portfolio to meet this goal, but one has to be concerned with the volatility of stocks. This is, after all, your nest egg. So, is there a safer way? Yes! The answer is found through being flexible. We accomplish this by using a fixed index or variable annuity life insurance product. With top rated insurers, you are set up with a stable and safe source of income. The end result is we provide enough income to pay the mortgage each and every month, and provide the additional income you need to live comfortably. In many cases, we see 50 to 100% more income from a managed portfolio than that of the reverse mortgage. << Back to Information on Reverse Mortgages
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