Finding an Alternative to Reverse Mortgages

By Arlene Schneider

Through a reverse mortgage senior citizens are able to free up the equity they have built up in their home. But there are certain features about a reverse mortgage that do not make them the best option for everyone. As a borrower you may wish to seek an alternative to a reverse mortgage. There are a few other options that will allow you to have extra income from the equity of your home. Here is an explanation of some of the available alternatives to a reverse mortgage.

*Family Advantage-Family Advantage is a line of credit funded by relatives or friends of a homeowner and secured by real estate. Family Advantage is a less expensive option to the reverse mortgage for most home owners. This type of financing does not require mortgage insurance, origination fees, closing costs or set asides. The costs of setting up a Family Advantage loan are 1/3 the cost of a traditional reverse mortgage. The biggest benefit to a Family Advantage loan is the home will remain in the family. There is no age requirement for this type of loan and any home can be used, not just a primary residence.

*EquityKey Program-this is an alternative that available for individuals 65-85 that is debt-free. EquityKey is an alternative method of financing that does not risk the equity that the owner has built up in the home. This program gives you the ability to receive income today, and in return EquityKey has the right to participate in the future appreciation of the home. The current equity is retained by the owner. The money received from EquityKey is based on the current value of the home. The money paid to the owner does not accrue interest or have to be repaid as long as the lender's agreement is followed, unlike that of a reverse mortgage or a traditional loan.

*REX Agreement-this type of financing is an agreement and not a mortgage. It is not a loan either. This is a purchase option that is a real estate investment agreement. It enables you to convert a portion of your homes equity into cash. In exchange, the agreement gives REX & Co. the option to share in a specified percentage of the future increase or decrease in the home's value. They share in a loss or gain in the value of the home.

Reverse mortgages are a good option for most seniors of at least 62 years of age, but they are not for everybody. While a reverse mortgage may not be in your best interest, there is an alternative to reverse mortgages that can also give you the financial security you may need. You just have to find out which financial vehicle will work best for you.

If you want more information about alternatives to a reverse mortgage, visit http://reverse-mortgages-today.com.
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