Option 1: Make payments toward your loan balance
A reverse mortgage works in reverse in that you receive payments from your home equity over the course of the loan. Like a traditional mortgage, there’s still interest to be paid. Instead of paying interest in monthly installments, though, most borrowers allow the interest to accrue and then they pay it all off at the end, once they move or pass away from the home.
But borrowers can also opt to make monthly interest payments, just as they would in a traditional mortgage, to keep the balance low. They can also opt to repay interest at any time, in any amount.
This option is available to borrowers should they change their mind about the reverse mortgage. They can repay the loan proceeds from the home sale, or through any other means available to them.
By repaying the loan, they are no longer tied to the home through the reverse mortgage.
Option 2: Sell the home and use a reverse mortgage for purchase to buy a new one
There’s another option: a reverse mortgage for purchase. This loan is available to qualifying individuals who are 62 and older, just like any other reverse mortgage.
If a borrower changes his or her mind about the reverse mortgage and finds that the home is no longer suitable for any reason, it’s possible to sell the home and take out a reverse mortgage for purchase that allows the borrower to buy a new home while still eliminating mortgage payments.
The reverse mortgage for purchase program has been used by borrowers to buy brand new homes, or homes that are better equipped for aging.
If you have a reverse mortgage but later decide your home is too big, the maintenance is too much work or is too costly, or you simply decide you are ready for another home, this second option may be available to you depending on your financial situation and the amount of home equity that remains in your home.
If, for whatever reason, you got a reverse mortgage but you aren’t so sure about it anymore, you may still have some very good options as to how you can change your housing situation. A reverse mortgage is not a permanent fixture; it’s a financial tool that can be used for a defined period of time.
If you changed your mind on your reverse mortgage, contact a professional who can help you consider your options.
“Reverse Mortgage Information Center” at https://reverse.mortgage/ (helpful blog and online calculator)