Is a Reverse Mortgage a Good Way to Supplement Retirement Income?

As a senior citizen, you know that your pension as well as any retirement savings, don't necessarily go as far as they used to. This is due mostly due to the economy, but in some cases, it can also be due to poor financial planning. In a case like this, you may be severely tempted to look at a reverse mortgage is a way of supplementing your retirement income and pension.

But the question may be whether or not this is actually a good idea. Of course, if you've seen any of the commercials on TV or in the paper, you know that this type of mortgage is based on the equity in your home and as such you can use it for whatever you see fit whenever you need. However, you need to remember that it is another type of loan. And while you may not have to repay it will you're in your home, should you move, then you will have to start repaying it.

One thing to consider here is to take a look at exactly what your basic needs are and create a monthly budget. Once you've done this, you can easily multiply that monthly budget by 12 to get what you need year. And if you consider what you want to do, such as taking trips for instance, you'll very quickly be able to find out exactly how much of a reverse mortgage you need to live comfortably do the things you want to do without worrying about your basic needs.

The key here is to remember that you need to have a solid plan before you apply for any type of reverse mortgage. To do otherwise, may mean that you take on too much and when it comes time to repay, you may not be able to. This is something that you want to avoid at all costs. 

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