You may begin to get offers in the mail for home value insurance coverage. It sounds great: Purchase this policy and if your home value drops within 10 years, you can sell it for whatever the current market value is and get an insurance check for the difference. At first glance this appears that you would not have to entertain a short sale because for $40-$50/mo. you can cover any deficiency. However, with most housing markets being in the valley and flat, it's unlikely that you would have a substantial drop in value in the next 10 years that would make this a good idea. Purchasing this type of insurance in say 2006-2008 would have been a great choice, but of course, there are no conversations about insuring losses in booming market. The housing 'bubble' was always a looming topic, but with the meteoric rise of housing prices year after year since 2002, most thought it would last....well, forever!
Reverse Mortgages are probably not even a thought if you are under 50 yrs old, but they become as common as offers for free dinners to attend a sales seminar as you enter old age. In short, a reverse mortgage is when you take a mortgage out on your primary residence in order to be paid a monthly amount until you die. In most cases, it is a bad idea to take a mortgage out on a property you own free and clear. The few people who it makes sense for have no relatives, no income, and need money to survive. Outside of that, there are usually many other options that don't put your home at risk. As with any financial decision, do as much homework as possible before considering any decision/expense that will affect your long term financial well-being.
