Deciding when to take a reverse mortgage can pose several advantages as well as disadvantages for the senior borrower, particularly when weighing the possibility of future home price increases and rising interest rates, according to a recent Huffington Post article.

Unlike a forward mortgage, where a prospective home buyer is pressured to make a purchase and have their mortgage approved and fully processed before the sale date, a senior contemplating a reverse mortgage isn’t necessarily “under the gun” and can deliberate as carefully as they want, writes Jack Guttentag, also known as The Mortgage Professor, in a recent article that was published by the HuffPost last week.

“Having the opportunity to consider all options without feeling pressured is a good thing,” Guttentag writes. “But it can be a bad thing if the conditions that affect the terms of the reverse mortgage for which they qualify change in an unfavorable way while they are waiting.”

Considering a homeowner who is age 62 with a home worth $200,000 and no existing mortgage, Guttentag posits several scenarios to illustrate the impact of delaying a reverse mortgage, and how external forces such as rising interest rates and home value appreciation fit into the equation.

“It might be prudent for seniors on the fence regarding whether they want a reverse mortgage or not to engage in watchful waiting,” he writes. “But for those who realize that a reverse mortgage will substantially enhance their lifestyle, watchful waiting is procrastination that could cost them dearly.”

Read more at the Huffington Post.

Written by Jason Oliva