Ya Gotta Spend Money to Make Money

I’m sure you’ve heard that phrase before. Business owners, salespeople…you know it very well. You have to be willing to spend some money in order to make it. You’re investing in your own success.

Senior homeowners have been investing in their homes for decades. Many have retired their mortgage debt, and are living in their home free and clear. Others have refinanced along the way, and still have mortgage payments. In either case, a reverse mortgage may be an attractive option for them.

One of the most consistent complaints about reverse mortgage is the potentially high closing cost. It’s true, there are reverse mortgage plans out there which waive all closing costs. But in most cases, the borrower will have closing costs associated with the funding of their reverse mortgage.

The thing is, your home pays for it. Nothing is out-of-pocket. Your heirs won’t pay for it, you won’t pay for it. Your house does. Some would dispute the comment that your heirs won’t pay for it by saying that, in the long run, they will by the reduced, or even eliminated inheritance they might otherwise receive. Well, this is true, and definitely something you should consider when thinking about getting a reverse mortgage.

ANALOGY ALERT!

Nothing is free. To everything there is a cost. If you’ve ever bought or sold something on eBay, you realize that things are as valuable as people are willing to pay. That thing in your attic that you’d sell for $1.00 in a garage sale may be worth $50 to someone halfway across the country. Reverse mortgages aren’t that subjective, but the point is, the value it may hold to someone may far surpass the number on the price tag.

I agree that closing costs are high. Hopefully adjustments will soon be here to help alleviate that. In the meantime, it is what it is. I have yet to have a single client of mine say it wasn’t money well spent. Especially when not even a single penny came out of their pocket.