TheHomeMap

Reverse Mortgage vs. Downsize?

Deciding whether to take out a reverse mortgage or to downsize your home may
not be an easiest choice. Many people will be put in a position to make this
decision over the next few years. A once certain retirement may not seem so
certain these days with the decline in real estate values and other assets.
We have recently seen an increase in marketing promoting reverse mortgages
to those of retirement age, urging them to take out a reverse mortgage.

An option that often is left out is downsizing to more suitable housing to
have an easier retirement. A large home may no longer be necessary for a
family whose kids have moved out. Maintaining such a large home may also be
a burden or luxury for many retired families. Rather than eroding at the
equity through a reverse mortgage, downsizing may be a better option for
some. For some people, a reverse mortgage may not even be within reach if they
have little equity. For those who can at least break even or walk away with
a significant amount of equity, downsizing is a good way to lower expenses
and create a more manageable household for those in or nearing retirement. Of course many people love their home and only wish to be able to spend the
rest of their life in their home. For those people who have equity and
cannot afford to maintain their home, a reverse mortgage may be the best
option. For many others who are not strongly attached to their home, there
may be more logical strategies that take just a little more planning and
willingness to make a change.

-Rafael Perez, Rafael@thehomemap.com www.thehomemap.com