11 Aug I need cash. Should I try a reverse mortgage or just move?

Q. I am 69 and a registered nurse. I haven’t been working for the last four years because employers consider me old and too expensive for them. I have supported myself with my IRA, Social Security and a small monthly pension. I have about $550,000 of equity in my home, but I have a mortgage balance of $260,000. I am unable to refinance because my debt ratio is too high. I am in despair and discouraged. I am house rich but daily poor. Is there another way to access the equity such as a reverse mortgage or should I just move? I don’t have any family to leave my estate to.
— Stuck

A. We’re sorry you’re having a tough time with your finances.

You have several options.

Generally speaking, reverse mortgages may not be the most efficient way to access equity in your home, said Ken Van Leeuwen, a certified financial planner with Van Leeuwen & Company in Princeton.

“You mentioned moving to another state, but that may not be necessary either,” he said. “Have you considered selling your current home and possibly downsizing or renting in the same area? You may be able to get a very attractive price for selling your current home and be able to rent something for the time being.”

If you sell your home at a high, Van Leeuwen said you’d probably end up buying high as well.

Renting might be a more viable option to maximize your cash flow, assuming you are comfortable renting for a period of time until housing prices come back down, which is not guaranteed, he said.

“In the end, you will want to make sure you understand all the underlying fees and expenses for whatever option you choose,” he said.

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This story was originally published on Aug. 11, 2021.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.