On the personal finance subreddit, a user sought advice on a common dilemma many seniors face: selling their home or getting a reverse mortgage.
The user explained that their 73-year-old father is struggling to pay off a $45,000 mortgage and a $15,000 HELOC, relying primarily on Social Security and a small pension. They said the father is considering selling his home in Florida, where the housing market is sluggish, or taking out a reverse mortgage.
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The Reddit discussion yielded a range of insights.
Some users suggested that selling could be more financially beneficial if the father is willing to rent for the rest of his life. This could potentially eliminate debt and provide a fresh start without the responsibilities of homeownership. One user wrote: “Selling often makes better financial sense if he is willing to rent for the rest of his life. But it depends on the numbers.”
Some highlighted the risks and emotional stress associated with moving in old age, including the loss of a support network and the physical and emotional toll of moving:
“OP’s father is 73, and moving comes with risks compared to a stable living situation. What if he hates the new place or loses his support network?”
Several users supported the idea of a reverse mortgage because it allows the father to continue living in his home and convert the home’s equity into cash to pay off debts and cover living expenses. A reverse mortgage can improve cash flow and help manage unforeseen expenses. One user explained, “A reverse mortgage might help if he can maintain the home and afford insurance. It’s a government program designed to protect seniors.”
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Experts generally advise that a reverse mortgage can be a good option for seniors who plan to live in their home long-term and do not prioritize leaving the property to heirs. Reverse mortgages allow homeowners to convert the equity in their home into cash without making monthly payments, benefiting those on fixed incomes. However, they come with high upfront costs and the requirement to keep up with property taxes and insurance. Failure to meet these obligations may lead to foreclosure.
Another proposed option was to hire a tenant to generate additional income without selling the property. One commenter wrote: “He might consider hiring a tenant for additional income.” Others suggested solutions involving family, such as a relative buying the house and letting the father live there, which could provide stability and keep the house within the family. One user suggested: “Can you buy his house? Hire a real estate agent to handle the sale, you buy it for about $75,000, and let him live there. It’s an investment for you and gives him stability.”
Ultimately, the decision to sell or take out a reverse mortgage should be made after careful consideration of all options. Consultation with an expert can provide tailor-made advice so that you can make the best decision for the father’s specific situation.
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*This information is not financial advice and personal guidance from a financial advisor is recommended to make informed decisions.
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This article “My Struggling 73-Year-Old Father Owes $45,000 on His Mortgage and $15,000 on a HELOC” – Should He Sell or Take Out a Reverse Mortgage? originally appeared on Benzinga.com
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