When it comes to mortgages, reverse mortgages don’t have so much of a good reputation. As a matter of fact, many Americans retired or not, sees reverse mortgages as a ‘loan of last resort’ or a loan to take out when there are no other options left. Others see the reverse mortgage as a loan taken out by either poor or uneducated people.

Reverse Mortgages Are Not Just for Low Income Seniors

What these people fail to see is that the reverse mortgage is a way to use the untapped equity in the home they’ve paid for throughout their working years.

The criticism of reverse mortgages is not really about the product itself, but with the way that people use them. People tend to use this lump sum payment to buy something they’ve always wanted. This why the Federal Housing Administration requires borrowers to undergo a counseling session before entering a reverse mortgage contract.

A reverse mortgage can be seen as a flexible alternative to the more traditional forms of retirement planning such as social security, 401ks or stock; and with more Americans living a lot longer than ever before, flexibility is essential!

For instance, if the stock market has taken a downturn, it may be time to pull funds from the reverse mortgage line of credit in order to sustain retirement expenses while the market stabilizes. Another instance would be to set up monthly reverse mortgage payments to help supplement social security payments and cover retirement expenses.

Those are two ways reverse mortgages can adapt to a retiree’s situation, not just a senior at 62, but also at 72 or 82. For example, a person planning for retirement may be saving at 62 for retirement but may need more cash flow when he turns 72, as they adjust to their new needs and wants. When they turn 82, fixed expenses may be set and monthly payments may be more attractive than they were at 72.

What we’re saying here is, things change, and so do retirement needs and a reverse mortgage is a way to, not only sustain retirement but also ensure that it is secure and worthwhile.

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