Certainly, if you don’t need extra income you probably wouldn’t need a reverse mortgage. But with investment portfolios diminished by recent economic conditions and the ever-increasing cost of living, many people find that supplemental money is needed to provide a comfortable lifestyle in retirement these days.
As with any loan, their are costs involved with a reverse mortgage. Most reverse mortgages have an origination fee, third party closing costs (such as appraisal, title and escrow), insurance, and a monthly servicing fee. These charges can be paid from the proceeds of the reverse mortgage, resulting in no immediate burden to the borrowers; the costs are added to the principal and paid with interest when the loan becomes due.
Most reverse mortgages extended to seniors to date have variable rates that are tied to a financial index and will vary according to market conditions. You also have the option to consider a fixed rate HECM program.
