'My Struggling 73-Year-Old Dad Owes $45,000 On His Mortgage And $15,000 On A HELOC' — Should He Sell Or Take Out A Reverse Mortgage?

In the personal finance subreddit, a user sought advice on a common dilemma many seniors face: selling their home or taking out a reverse mortgage.

The user explained that their 73-year-old father struggles to pay off a $45,000 mortgage and a $15,000 HELOC, relying mainly on Social Security and a small pension. They mentioned the father is considering selling his home in Florida, where the housing market is slow, or taking out a reverse mortgage.

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The Reddit discussion provided a range of insights.

Some users suggested that selling might be more beneficial financially if the father is willing to rent for the rest of his life. This could potentially eliminate debt and provide a fresh start without the responsibilities of homeownership. One user wrote, "Often, selling is financially better if he's willing to rent for the rest of his life. But it depends on the numbers."

Some highlighted the risks and emotional stress associated with moving at an older age, including losing a support network and the physical and emotional toll of relocating:

"OP's dad is 73, and moving carries risks compared to a stable living situation. What if he hates the new place or loses his support network?"

Several users supported the idea of a reverse mortgage as it allows the father to stay in his home while converting home equity into cash to pay off debts and cover living expenses. A reverse mortgage could improve cash flow and help manage unforeseen expenses. One user explained, "A reverse mortgage could help if he can maintain the house and pay insurance. It's a government program designed to protect seniors."

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Experts generally advise that a reverse mortgage can be a good option for seniors who plan to remain in their home long-term and do not prioritize leaving the property to heirs. Reverse mortgages allow homeowners to convert home equity into cash without making monthly payments, benefiting those on a fixed income. However, they come with high upfront costs and the requirement to keep up with property taxes and insurance. Failure to meet these obligations can lead to foreclosure.

Another option suggested was taking in a renter to generate additional income without selling the home. One commenter wrote, "He could consider taking in a renter for additional revenue." Others proposed solutions involving family, such as a family member buying the house and allowing the father to live there, which could provide stability and keep the home within the family. One user proposed, "Can you buy his house? Hire an agent to sort out the sale, you buy it for around $75K, and let him live there. It's an investment for you and provides him stability."

Ultimately, the decision to sell or take out a reverse mortgage should be made after careful consideration of all options. Consulting with an expert can provide tailored advice to help make the best decision for the father's specific situation.

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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.