Reverse Mortgage Suitability

iReverse Home Loans believes it’s extremely important for you to understand and determine whether a reverse mortgage is a “suitable” product for your individual scenario.

What is “Suitability”?

Suitability is defined as something that is right, appropriate or fitting for a particular person, purpose, or situation.

Reverse Mortgage suitability involves determining whether a reverse mortgage is a suitable product for an individual homeowner.

What determines whether a reverse mortgage is a suitable product for an individual homeowner?

Some things seem quite obvious. A multi-story home likely isn’t suitable for an individual in a wheelchair.* A razorblade is not a suitable toy for a child.

Sometimes, the decision of whether or not to take out a reverse mortgage is easy.

For example, an individual who plans on moving out of their home within 12 months and only needs $3,000 to fix a furnace probably isn’t the best candidate for a reverse mortgage. A more suitable choice would be seek a personal loan from a family member or local bank. Another suitable option would be a community or government sponsored home improvement program that offers financial assistance through the form of grants, deferred-payment loans or no-interest loans.

The obvious factors that should be considered include:

  • How long the homeowner(s) intend to remain in the property
  • Whether there are any health issues that would prevent the homeowner(s) from remaining in the home
  • Whether the homeowner(s) want to preserve the equity in the home for their heirs
  • Whether the homeowner(s) have the financial ability to pay for ongoing housing costs (taxes, insurance, condo fees, insurance, property maintenance)

However, determining whether a reverse mortgage is a suitable product for an individual homeowner is rarely as simple as the example provided above. Often, there are many more variables that make the decision more complex and more importantly, these variables are often personal and subjective in nature. That means there’s not a computer calculation that can make the decision for you. One variable may be much more important to one homeowner vs. another.

Since these variables are personal in nature, reverse mortgages can’t be inherently suitable or unsuitable (absent fraud). Whether a reverse mortgage is suitable is personal in nature depends on each homeowner(s) individual situation and values.

Who determines what is suitable for an individual homeowner?

We believe government regulators should not mandate whether or not a reverse mortgage is suitable for individual homeowners. Education and communication between homeowners and their trusted advisers is the only way for homeowners to make the best possible decision for them.

How can iReverse Home Loans help you make that determination?

iReverse Home Loans should not be considered an “independent trusted adviser”. Since we are a business who makes money from reverse mortgages, by definition we are not independent. We can, however, provide you with tools (such as the information on this page) that may help facilitate the conversation and provide you the information you need to make a your own decision.

*To demonstrate why this is an individual and personal decision, consider the statement, “A multi-story home likely isn’t suitable for an individual in a wheelchair.” What if the homeowner had a large first floor with master bedroom and had two additional bedrooms upstairs for children? Would you still believe a multi-story home wouldn’t be suitable for an individual in a wheelchair? The point is, suitability is a personal decision with many variables that only can be made by homeowners…hopefully after consulting with independent trusted advisors.

If you decide to pursue a reverse mortgage, we invite you to call us toll-free today at 1-800-486-8786 and experience the difference working with America’s Most Trusted Reverse Mortgage Company.