With the volatility of today’s housing market, reverse mortgages have made a comeback as a serious alternative for homeowners who have built up substantial equity through years of mortgage payments. Reverse mortgages provide a number of benefits:

1. Reverse mortgages provide an alternative to traditional mortgage borrowing against your equity.

Borrowing against your equity entails monthly payments on a new loan. With a reverse mortgage, the borrower uses the home’s equity to get cash or credit with no monthly mortgage payments. The debt is paid when the borrower dies, sells the home or moves.

Each month, the debt increases, and the equity decreases.

2. Reverse mortgages ensure financial independence and an adequate standard of living.

A reverse mortgage can help you avoid burdening your children who may be struggling to make it on their own. It will help you maintain financial independence, especially if you are living on a fixed income, and will provide a level of comfort without having to leave your current home.

3. Reverse mortgages provide tax-free income for a wide variety of uses.

Borrowers utilize their tax-free income for a number of purposes including vacations, healthcare, paying for educational expenses for grandchildren, purchasing an annuity, etc.

4. Reverse mortgages will help you remain in your current home.

Seniors who have lived in their homes for years generally do not want to move.

5. A counselor from HUD will provide free consultation.

This useful government program is required for all individuals applying for a reverse mortgage. It will protect you from unscrupulous lenders and will ensure you understand the basic provisions involved. In lieu of making monthly payments, interest will be deferred and repaid when you no longer live in the home.

6. Reverse mortgages can supplement your retirement income.

Sometimes, people need a little more than Social Security to make ends meet. Reverse mortgages supplement your cash on hand, pension payments and other sources of income.

7. Many reverse mortgages are federally insured.

The most common type of reverse mortgage, the Home Equity Conversion Mortgage, or HECM, is federally insured and backed by the U.S. Department of Housing and Urban Development.

8. Reverse mortgages help you avoid down-sizing.

Senior homeowners generally choose reverse mortgages in order to remain in their current home. In addition, they may make more financial sense than down-sizing to a smaller residence and incurring a new series of mortgage obligations.

9. Reverse mortgages provide proceeds for as long as you live in your home.

With the miracle of modern medicine, seniors are enjoying their golden years for longer than ever. The major downside, outliving your money, can be avoided with reverse mortgages.

10. Reverse mortgages reduce the unpredictability of moving for elderly homeowners.

Seniors need to remain in a familiar environment for health and social reasons, including orientation with their surroundings, avoiding falls or physical difficulties, and staying close to family and friends. Especially in their later years, moving can become a dangerous event.

During times of transition, reverse mortgages offer a viable alternative with real financial, social and physical benefits. They should be considered carefully for the freedom they can offer, both for participants and their families.