Retirees often have to navigate the homeownership and mortgage landscape with a series of unique concerns, owing to the natural occurrences of aging and the reality of what is largely a fixed income. Taking advantage of tools designed primarily to serve older Americans should always be a consideration for anyone in or near retirement, and one such tool that can be used — for those in the right situation — is a reverse mortgage.
This is according to a column published at Realtor.com, offering a series of six tips for retirees to keep in mind when navigating the homebuying and mortgage landscape.
“About 18% of homebuyers were younger baby boomers (aged 56 to 65) in 2021,” the column reads. “And older boomers (aged 66 to 74) scooped up an additional 14% of the market during the same period, according to a recent report from the National Association of Realtors. Buying a new home is a logistical and financial challenge no matter your age (or how many times you’ve done it). But our mortgage and lending system can be especially challenging for retirees to navigate, simply because lenders prioritize income.”
The reverse mortgage relevance to the tips the outlet shares — in addition to the fact that a reverse mortgage is designed exclusively for people aged 62 or older — comes from the “creative” ways that seniors can take advantage of certain products they have access to. One real estate agent who discourages seniors from being told they are “too old” to buy a home instead says that finding a professional well-versed in different types of mortgages is key.
“You should consider asset depletion, which entails using savings as income,” says John W. Mallett, founder and president of MainStreet Mortgage, in Thousand Oaks, Calif. to the site. “You could also use qualified savings as income, such as an IRA or 401K.”
A reverse mortgage is absolutely worthy of consideration for a senior in the right situation, he adds.
“Reverse mortgages require a larger down payment than conventional loans,” Mallett says. “However, you have the option to make no payments, interest-only payments, fully amortized payments, or anything in between. So while reverse mortgages can be complex, you will know if it’s right for you once you understand how they are structured.”
Read the column at Realtor.com.