If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. Would it be smart to take out a reverse mortgage? “Am I Going To lose my property? Who’s going to be on title, me, the bank, the us government or perhaps all of us? Those are all very serious and very good questions. Other areas of life have benefits and drawbacks. Reverse Mortgages are no different. Obviously you need to inform yourself about the options you have along with the pros and cons of a reverse.

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Benefits of Reverse Mortgages: (also called HECM – heck-uhm)
Improve your monthly cash flow for as long as you live in the home. You can learn more about reverse loansĀ  here.
As long as there is equity in your house, depending on your initial qualifications and growth, you can make changes to the way you access the homes equity. The unused portion of the Credit line grows larger month after month at 1.25% over the current interest rates. This is a way for many senior citizens to be able to stay in their home and be able to afford care for themselves and the property.
Relocating might cause mental chaos for many older home owners. Memories were made in your “home sweet home”, and close proximity to loved ones and remaining in your community may be a good choice.
You do not have to own you home free and clear to qualify for a reverse mortgage. There isn’t any out of pocket expenses aside from the appraisal fee and HUD counseling. Some HUD counseling agencies will waive the charge.
You can not be evicted from your home as long as you are abiding by the agreement in the contract. Mainly these agreements include maintaining your home and paying your taxes, insurance and HOA dues.
You can refinance out of the reverse mortgage into a traditional loan presuming you qualify and there is equity in your home.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
This is what is referred to as a non-recourse loan. Put simply, you have no personal responsibility for this loan, neither does your estate or your heirs.
Reverse Mortgages have many safeguards: capped mortgage rates, a limitation on fees, HUD counseling, asset protection (non-recourse loan), no maturation date (cannot become due within a borrower’s life time).
Can be a financial tool to help beneficiaries avert a portion of the real estate tax.
Your beneficiaries might be able to claim the interest from your mortgage on their income taxes after your death. (Make sure to consult your income tax advisor for guidance.)

Everybody likes the good stuff or the pros. Easy stuff right? Sure, the dutiful old loan officer always gives you the good parts, but there are some things that may be drawbacks to Reverse Mortgages. Here are the cons:

The Disadvantages of Reverse Mortgages:
They can and quite often are higher in price than a traditional loan. However, you can not really compare them as they are very different loan products.
If whatever you are leaving for an inheritance is your home, there may or may not be equity for you to leave behind. A Reverse Mortgage really is a rising debt loan since you are not making mortgage payments. It is the complete opposite of a standard home loan where equity will increase as mortgage payments are made.
You will typically net more cash from the sale of your house than you will with a reverse mortgage.
These financing options really do not seem sensible if you are intending on moving in the future.
If you do not pay your taxes or insurance the lender may foreclose on your property.
If you are not living in your main residence for a period exceeding 12 consecutive months, the Reverse Mortgage will become due. (Nursing facilities, assisted living, moving, etc.)
Medicaid could be affected, and you may not be entitled to benefits unless of course you spend down your Reverse Mortgage proceeds monthly. (Check with your attorney and Medicaid for info.)

When NOT to get a Reverse Mortgage:
An equity loan are often much less expensive way to get cash out of your house.
{In the event your major goal is repairing your home, a community grant may work much better.|If you only need to add a roof, windows or other energy efficient options. If that is the case, subsidies and assistance might be available. Go here for more reverse mortgage information.
If you know you’re going to be moving to an assisted living facility in the very near future.
If family and friends believe that a senior reverse mortgage is not a wise decision, give some thought to their recommendations and maintain a balanced view; they have your best interests at heart.
Should you have other options such as moving in with family and friends or the capacity to spend money on senior living facilities.
If you are using the home or property for farming.