What's the best age to take out a reverse mortgage? Experts weigh in

If you're going to pat into your location equity with a reverse mortgage, marque definite you're doing truthful astatine an optimal age. Getty Images

The mean location worth successful the United States is presently $368,581, a 0.3% summation from the twelvemonth before, according to the latest Zillow data. But portion location values stay high, sticky inflation has been pushing up the costs of conscionable astir everything. As a result, status costs are besides elevated, starring immoderate seniors to see the benefits of a reverse mortgage. 

Through a reverse mortgage, seniors person the enactment of tapping their home equity successful status without selling the location oregon repaying the indebtedness immediately, and determination are nary monthly payments to origin in. Typically, you indispensable beryllium astatine slightest 62 years of property to qualify for a reverse mortgage. But conscionable due to the fact that you suffice astatine that property doesn't mean it's the perfect clip to instrumentality vantage of a reverse owe oregon that it's the close loan. 

If you're considering your options, should you get a reverse mortgage? And if so, what's the champion property to instrumentality retired a reverse mortgage, and however bash you cognize it's the close time? To assistance you decide, we gathered reverse owe adept proposal from respective owe and concern experts. 

Compare today's apical reverse owe indebtedness options online now.

What's the champion property to instrumentality retired a reverse mortgage? Experts measurement in

A reverse owe tin beryllium a astute mode to usage your location equity successful retirement, for the close candidate, arsenic it allows qualified seniors to crook their disposable location equity into funds for surviving expenses and status costs. But arsenic with immoderate loan, the accumulated involvement and imaginable fees volition person to beryllium paid either aft you determination retired of the location oregon die. Plus, you're chipping distant astatine your disposable location equity and moving the hazard of outliving the indebtedness benefits. 

So, if you get a reverse owe excessively early, it tin trim the semipermanent worth and leave constricted equity for your heirs. Because of the complexity of this product, it's indispensable to see reverse owe pros and cons and the close clip for borrowing. Here is what experts accidental to consider. 

Your existent property and equity amount

A reverse owe for retirees tin beryllium a astute alternate to selling a location successful retirement. To get the astir benefits retired of it, though, it's important to measure your existent property and the magnitude of location equity that's accessible to you. 

"The older you are, the easier it is to get much money," says Mason Whitehead, subdivision manager astatine Churchill Mortgage. "If you're successful your mid-sixties, it's going to beryllium truly hard to get anyplace adjacent a precocious loan-to-value. You're going to beryllium capped astir a 35% loan-to-value close now." 

That's due to the fact that reverse owe lenders origin your beingness expectancy into the equation. At property 65, with a beingness expectancy of 85, lenders expect your equilibrium could turn for 20 years. Based connected this, older borrowers tin instrumentality vantage of much equity and a higher indebtedness amount. Depending connected your needs, see whether the borrowing magnitude you mightiness suffice for is enough. 

Find retired much astir however a reverse owe indebtedness could payment you during retirement.

Your income needs

When deciding connected what property to pat into location equity successful retirement, measure your existent income needs and fiscal goals. If you request further income due to the fact that of rising costs oregon constricted currency flow, a reverse mortgage whitethorn beryllium a bully enactment to see astatine your existent age, provided that you're within the property bracket required to suffice for one. 

"Most retirees are going to beryllium connected immoderate benignant of fixed income, and the biggest payment of a reverse owe is nary much owe payments. You inactive person to wage taxes and security connected the location each year," says Whitehead.

In this situation, you tin escaped up the currency you enactment toward your owe payments and besides person currency instead. Since it's a indebtedness that you indispensable repay with interest, the payments you person from a reverse owe are tax-free. 

Your semipermanent fiscal goals

Reverse owe fiscal readying besides requires borrowers to see their semipermanent goals. For example, if you program connected moving adjacent to household successful the adjacent fewer years oregon privation to bequeath your location to your children, you mightiness deliberation doubly astir a reverse mortgage, nary substance what property you are. 

That's due to the fact that erstwhile you instrumentality retired a reverse mortgage, the payments you person travel from your location equity and your indebtedness equilibrium grows arsenic involvement accrues. If you usage a important magnitude of equity, you whitethorn person small near for your heirs. If you program connected moving, that volition trigger the repayment connected the reverse owe loan. 

Your different status income sources

You should besides see your different sources of status income erstwhile determining the champion property to instrumentality retired a reverse mortgage. You whitethorn person entree to Social Security benefits, a 401(k) and different investments successful a brokerage account. If you're financially stretched with constricted means, a reverse owe tin supply different root of cash. A reverse owe whitethorn besides beryllium a bully option successful different cases arsenic well. 

"It tin beryllium adjuvant if they request to hold Social Security, for example, oregon debar drafting investments during a downturn," says Nadia Evangelou, elder economist and manager of existent property probe astatine the National Association of Realtors. "So precocious 60s to aboriginal 70s, for example, often this is the saccharine spot."

Your wellness and plans to property successful place 

Senior homeowners who request to entree superior often person to determine whether to enactment successful their location oregon sell. When reasoning astir the champion property to instrumentality retired a reverse mortgage, it's important to see your wellness presumption and plans to property successful place. 

"There's nary magic age, but I typically archer clients to see a reverse owe successful their aboriginal 70s oregon later, erstwhile they're committed to aging successful spot and person a clearer presumption of their income needs," says Emilio Cabuto, certified fiscal planner astatine Verus Capital Partners. 

If you're successful bully wellness and tin property successful place, a reverse owe tin beryllium a utile tool. It allows you to usage your built-in equity arsenic a fiscal assets and to stay successful your home. 

"The location is the azygous largest plus they ain and often worthy much than their status accounts. But that worth is locked successful arsenic location equity, arsenic we say. So a reverse owe unlocks portion of that equity and turns it into usable currency portion allowing the homeowner to enactment successful their home," says Evangelou.

If you're successful mediocre wellness oregon volition yet request to determination to an assisted surviving facility, that tin interaction the usefulness of the loan. When you move, you indispensable repay the reverse mortgage. At that point, you'll person overmuch little location equity, truthful you mightiness not get overmuch backmost oregon capable to wage for alternate surviving arrangements. 

The bottommost line 

There is nary azygous champion property to instrumentality retired a reverse mortgage, and it depends connected your unsocial situation. "I deliberation the champion property for a reverse owe is erstwhile their fiscal needs, their lodging plans, and the marketplace each align. So for some, that's close astatine 62. For others, it's waiting until their 70s oregon later," says Evangelou. Before taking retired a reverse mortgage at immoderate age, beryllium definite to bash your probe and recognize each costs and fees. Ask astir outgo options, comparison involvement rates and cheque retired your different location equity options arsenic well, including a home equity enactment of recognition (HELOC) oregon location equity loan.