As I mentioned in a previous blog, today’s restrictions placed on the HECM reverse mortgage by HUD has eliminated a large number of potential borrowers from qualifying for enough proceeds to make reverse mortgage a viable option.
Reductions in the initial loan amount coupled with the newly enacted “financial assessment requirement” have leveled a one-two punch on seniors negating the program as a possible solution.
These new requirements were clearly an overreach by Congress and we can always expect Congress’s overreactions to increase restrictions on something that is beneficial to many.
The 4 Reverse Mortgage Alternatives
Many people look into reverse mortgages due to the fact that they cannot afford to maintain their home in addition to other living expenses (especially if they have increased exponentially due to health care needs).
If you are in a similar situation and have been denied a reverse mortgage, there are some reverse mortgage alternatives. To be exact and realistic, there are only 4 reverse mortgage options:
Ask Your Children For Help With Expenses
Today, many seniors make deals with their kids to pay monthly expenses in exchange for the inheritance of the home later which can be viewed as an alternative “family financed reverse mortgage”.
Since transactions involving money and property between family can turn into a potential nightmare, there are several companies that specialize in managing the transaction so all parties are equally and legally protected.
These companies insure that family members have an unbiased third party arbiter in case one side fails to fulfill the agreement.
Sell And Move
Selling and moving is an option that is much easier said than done and it can actually be a very complicated process.
Some things to think about before selling and moving:
- What if the house is not in good condition to attract a buyer?
- What if the house needs a number of expensive repairs in order to make it ready for sale and you simply don’t have the money to bring it up to marketable standards?
- Where do you go after you sell?
The thought of leaving the home that you’ve lived in for years along with your friends and community can be overwhelming. In fact, a survey of seniors shows that almost 90% of seniors want to stay in their homes until they die or are unable to care for themselves.
Sell The House And Move In With A Family Member
This is usually the least desirable option as many seniors I’ve met over the years would rather live in a shelter than with their kids or other family members.
Those of us who have raised children have all used the phrase “as long as you’re under my roof you will live by my rules!” When a parent moves in with the child, that dynamic gets turned upside down and now they become subjected to the rules of the child’s home.
Leaving home and moving in with one of your children is a loss of independence and is generally not what most people want to do.
Sell Your Home And Stay With A Sale Leaseback
The final and often best reverse mortgage alternative is home sale leaseback. A sale leaseback allows you to liberate the equity in your home by selling it while still being able to stay in it by renting it back.
My company has created a simple program designed to help seniors stay in their homes while also providing a good business deal for our investors. You want to stay in your home and at this point it might not matter if the deed is in your name, just as long as it’s still your home!
Our investors want to invest in real estate and the best prospective property is one that already has a tenant who takes care of the property and has the means to pay rent on time. What better investment opportunity than one where the seller is also the tenant and has an emotional attachment to the property? We believe that this is the definition of a “win-win” transaction.
I’ll be discussing the details of this program in a later blog but for now if you’d like more information on home sale lease backs click the button in the picture below or call 800-407-5696 and I’ll personally discuss the details with you.