It’s no secret that the stock market is experiencing a high volatility period. But with the housing market still on the rise, reverse mortgages are becoming an incredibly attractive alternative for Americans who need to save for retirement and don’t want to leave their homes.

According to the U.S. Department of Housing and Urban Development, Home Equity Conversion Mortgage loans were up 26% in March. It had a slight drop of 3.8% last month, but it still remained above the average in the past couple of years, with over 6,000 loans in April. 

The rule changes by the U.S. Department of Housing and Urban Development made in 2017 had a severe impact on the economics of reverse mortgages. The organ, which is responsible for the HECM program, raised the mortgage insurance on the loans from 0.5% to 2%. With that, the upfront price of reverse mortgages increased by $1,500 per $100,000. That said, reverse mortgages conditions are still favorable given the current stock market. 

Wade Pfay, a principal and advisor with Tysons said that now is a great moment to consider a reverse mortgage. Not only has there been a huge raise in home prices, but interest rates are still low. When it comes to the financial planning profession, reverse mortgages have developed quite the following. Pfau himself recommends them as a useful alternative in retirement management. 

Since home equity represents a big percentage of the average retired American’s means, using it as a source of capital when they’re in need of money is a sensible choice. Even if the costs for reverse mortgages are higher now than they’ve ever been. But like with everything else, there are pros and cons of using the method. Learn what they are below. 

See below if reverse mortgages are right for you.

If you need any help with managing your income, we’ve got you covered. Follow the link below for some useful tips on the matter!