How Soon Should You Take Out a Reverse Mortgage?

Are you thinking about getting a reverse mortgage, but are not sure whether you should do so now or wait a few years?

Trying to figure out the timing for a reverse mortgage is not always easy. But a good starting point is to learn more about the advantages and disadvantages of waiting versus taking one out right away.

The Benefits of Waiting to Take Out a Reverse Mortgage

If you expect your home value to increase, it might make sense to hold off before you apply for a reverse mortgage. You could qualify for more with a higher home value in a few years than you would today with a lower home value.

The Drawbacks of Waiting to Take Out a Reverse Mortgage

Home values do not always continue to rise. Sometimes, they drop. If you wait, and home values decline, you might not qualify for as much when you apply for a reverse mortgage. The same may be true if there is an increase in interest rates.

Additionally, you will be missing out on some of the prime advantages of taking out a reverse mortgage right away. See more below.

The Benefits of Taking Out a Reverse Mortgage Now

Say you decide to take out your reverse mortgage as an HECM line of credit. That line of credit grows at a guaranteed rate—specifically the part of it you are not using.

So, taking out a reverse mortgage well before you need it can pay off considerably in some situations.

But let’s also consider the fact that if you do end up needing it sooner than you expect, the money will be there waiting for you, rather than needing to go through the process of applying first.

Also, do not forget all the ways in which a reverse mortgage can enhance your life during retirement. Contrary to what a lot of people believe, you do not need to be desperate for cash to benefit from a reverse mortgage.

Even if you do not “need” the money, you can buy things you want with it, like upgrades to your home.

There’s no point in putting off such upgrades. The sooner you pursue them, the longer you can enjoy them.

The Drawbacks of Taking Out a Reverse Mortgage Now

The main potential disadvantage of taking out a reverse mortgage right away would be if you could qualify for more later, as discussed.

But sometimes, even if your home value is going to end up increasing, you might still get more money now by applying for a reverse mortgage right away and watching it grow.

The Michael Harrell Group Can Help You Weigh the Pros and Cons of Taking Out a Reverse Mortgage Now or Later

With so many factors at play, it can be difficult to figure out on your own if you should take out a reverse mortgage right away or if you should wait.

The Michael Harrell Group can help you look at all the individual factors in your case to decide about the most advantageous course of action.

To schedule your consultation now, please give us a call at (214) 269-3593. Let’s help you get the most out of your retirement with a well-timed reverse mortgage.