For certain baby boomers a reverse mortgage may or may not make sense... you are simply cashing in on the equity that you have built up in your house.The more equity you have the more cash that you can get. Both you and your spouse have to be at least 62 years old and the house has to be your primary residence.
Let's say that you and your spouse are both 62, money is a little tight, and you own your home free and clear of any mortgages... you estimate its value to be $500,000.
You apply for a reverse mortgage...there are no credit requirements... if approved, in essence you are selling the equity in your home... you make no further mortgage payments...you can stay in the home as long as you want.
You can take the proceeds in a lump sum or arrange for a stream of monthly payments... all tax-free.
If you do want to move, then the reverse mortgage is a lien against your property and must be paid off...
If you both die ownership of the property with a reverse mortgage reverts to the lender... and the lender will sell the house to recover the amount of the reverse mortgage... the excess if any will go to your estate.
That's why if your house is worth $500,000 you may get a reverse mortgage lump sum payment of $300-$350,000... and fees on reverse mortgage are high 8 to 10%.
You may be retired and not know that you can cash out your home equity that you built up over the years...this could literally change the way you enjoy retirement... see if it's for you, there is no obligation.
You may even buy a sailboat and head south!!