SHOULD YOU STAY OR
SHOULD YOU GO?
Staying Put: Packing up and selling a loved
home with so many memories is a difficult
decision for many longtime Dallas residents. One viable option open to senior
homeowners is the reverse mortgage,
which allows homeowners to turn the value
of their home into cash without having
to move or repay the loan each month.
Guaranteed by the U.S. Department of
Housing and Urban Development, HUD
offers seniors a federally insured private
loan as a means to provide financial security and supplement social security, meet
unexpected medical expenses, make home
improvements, and more.
The money from a reverse loan may be paid
to the borrower in a variety of ways: a lump
sum, a regular monthly cash advance, as a
credit line account or in any combination
of the above. Typically, borrowers do not
have to pay anything back until they permanently move out of the home, sell, or pass
away. Eligibility for most reverse mortgages
requires that the home should be owned
outright by the applicant, and that the
applicant is 62 years of age or older. (Visit
AARP’s website and use their Reverse Mortgage Calculator: www.aarp.com).
A reverse mortgage offers retirees a distinct
advantage. Since most lenders determine
a borrower’s ability to pay back the loan
by reviewing the borrower’s income, many
retired seniors simply cannot qualify for
a traditional home equity loan. But a
reverse mortgage does not require monthly
payments, and therefore no minimum
amount of income is required for the loan
application. Most reverse mortgages require
no repayment as long as the owner, or any
co-owner, lives in the home.
The best way to determine if a reverse mort-
gage is the best fit for one’s retirement plan
is to honestly assess the following:
• How much would the home sell for on
today’s market?
• What would the cost be to buy and
maintain, or rent, a new home?
• Would there be any money left over
from the purchase of a new home that
could be safely invested?
• What are the options for downsizing
into a less expensive home, renting an
apartment, or moving into an assisted
living or alternative senior housing
situation?
Borrowing money for a reverse mortgage is not
advised until looking into all of these senior
living options. By being honest about current
needs and housing trends, and exploring all
the options, seniors can be assured that they
have selected the best housing choice that
uniquely fits their budget and lifestyle needs.
PACK IT UP
Being realistic about your life, finances and
longevity is a must if you decide to move to
another community, says Calvin Chamness,
real estate agent/developer/builder with JW
Development Inc. He advises, “You have to
think about your health and your future and
expand your thinking beyond the average
life expectation. Make sure that you’re close
to hospitals and doctors that can provide
you with the best care. Do they accept your
insurance? All of this needs to be considered
when moving from your current circle of
friends and community to a new area. This
is where a real estate agent can really help a
person or family trying to find a retirement
situation for someone, as they have access
to the most current facts and figures to help
you make an informed decision.”
“Many who are making these decisions for
themselves need to learn to be a little bit
selfish,” says Chamness. “I mean, be selfish in a