subject: If I Wait To Do My Reverse Mortgage, Will I Get More Money? [print this page] If I Wait To Do My Reverse Mortgage, Will I Get More Money?
There are three factors that determine how much money you get when doing a reverse mortgage. In this article, we will address those.
1. Age.
You do need to be at least 62 years old to qualify for a reverse mortgage, but some say that it will benefit them to wait until they are older. While you will get more money if property values and interest rates don't change, in my opinion it does not make sense to wait. Interest rates may rise, and a small increase in rates will have a larger negative impact than being older will benefit you.
The prior paragraph has an exception. If there is a spouse under 62 years old, but you qualify, should you wait until everyone is old enough? I can definitely say "it depends". If there is a hardship like potentially losing your home or needing a sum of money for medical expenses, it can make sense to just do the loan. Another reason to not wait is if the spouse is planning to move upon your passing so they can live near family. By taking a person off title and doing a reverse mortgage, you run the risk of leaving them without a home. They will need to refinance or sell the home since they weren't on the reverse mortgage. Please remember: It doesn't usually make sense to remove a person from title just to get more money, unless there is a hardship being avoided.
2. The interest rates.
Interest rates are at an all time low. Fixed rates are in the low 5's. An interest rate hike of a percent or more could mean thousands of dollars less that you receive. Do you want to gamble with what the rates will be in 3 or 4 years?
3. The market value of your home.
You may be better off using today's value of your home instead of waiting and guessing on what the value will be in a few years. We have had several clients wait a few years, only to have the property values drop dramatically and risk their eligibility. Guessing on real estate values is hard enough today, let alone three or four years from now.
