Reverse Mortgage vs. Selling Your Home: Which One Should You Choose? 

Retirement is a time for making several major decisions.  

One of the biggest decisions that retirees must make is where to live:  

• Do you want to stay in your current home?  

• Do you want to stay in the same area but downsize to a smaller home?  
• Do you want to relocate to another city to be closer to family or to live in a warmer climate?  
• Do you have plans to move in with your children or other family members? 

And the options could go on.  

Retirees may also be looking for ways to offset costs during retirement.  

If you’ve lived in your home for a significant amount of time, you likely have significant equity in your home. Two options for accessing that equity are a reverse mortgage and selling the home.   

Let’s look at both options and evaluate which one makes sense for your situation as well as how they relate to the question of where to live.  

What are the Benefits of a Reverse Mortgage 

A reverse mortgage is a good idea for those who want a way to access their home’s equity, but also want to stay in their current home for their retirement.  

There are advantages to staying in your home in retirement. For example, you are able to remain in the same area where you already have an established community. 

While retirement communities abound throughout warmer climates in states like Florida, Arizona, and California, the truth is that the majority of Americans opt to retire in place. A long-term study by the Center for Retirement Research at Boston College found that only 7% of retired Americans move each year.  

It can also be costly to move. Once you add up real estate commissions, taxes, fees, and the cost of moving, you may not save as much money as you were hoping.  

The funds from a reverse mortgage can be used to make any necessary modifications you may need as you get older such as installing handrails and making showers more accessible.  

Homeowners who do wish to relocate can use a reverse mortgage to purchase a home. This is known as a reverse mortgage for purchase, or HECM for purchase.  

With a HECM for purchase, you are able to use the proceeds from a reverse mortgage to buy a new home. This may be a good option for those who want to move to downsize or relocate but don’t want to take on additional mortgage payments.  

Reverse Mortgage vs. Selling Your Home: Which One is Right for You? 

Whether you decide to get a reverse mortgage or sell your home, the decision comes down to assessing your needs.  

If you are wanting to stay in your current home, and you have a need for additional funds to supplement your income, pay for major projects or renovations, or have an additional emergency fund, then a reverse mortgage may be the way to go.  

If you are ready to be done with home ownership and you are ready to cash in on your investment, then selling your home may be the way to go.  

It is recommended that you discuss these decisions with your financial advisor and/or your family members who may be impacted by your decision. 

Next Steps 

One of our goals is to make major financial decisions a little bit easier by providing reviews of the top service providers.  

If you are ready to move forward with a reverse mortgage, we’ve curated a list of the top reverse mortgage lenders right here.  

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This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement.