I meet with senior homeowners that are thinking about getting a reverse mortgage. ”Is this the most suitable decision for me and my spouse?” Could I lose my home? Who is on title to the property once you get a reverse mortgage? Those are fantastic questions that all have answers. With many choices in life, you have to decide what makes the most sense. In terms of obtaining a reverse mortgage, some serious thinking and decisions should be made. Below is a variety of information about reverse mortgage that you should consider.

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The PROS of Reverse Mortgages: (also called HECM – heck-uhm)
Extra cash flow guaranteed through the Government which continues so long as your home is your primary residence. You can learn more about reverse mortgagesĀ  here.
As long as there is equity in your house, based on your initial qualifications and growth, you could make changes to the way you access the homes equity. One of several really cool features in regards to the line of credit it that the unused portion of the credit line grows at the current rate plus 1.25%. A great choice for those that wish to remain in there home.
Moving might cause psychological hardship for many senior home owners. Memories were made in your “home sweet home”, and close proximity to loved ones and remaining in your town might be a better choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. Almost all of the closing costs can be lumped into the loan with the exception of the counseling fee and appraisal.
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 assuming you are eligible and there is equity in your home.
After the sale of your home you’ll never owe more than the house is worth.
Your financial assets can not be attached to pay off the mortgage debt, additionally, the debt will not pass to your heirs or your estate. The house stands for the debt (non-recourse loan).
Reverse Mortgages have numerous safeguards: capped interest levels, a restriction on fees, HUD counseling, asset protection (non-recourse loan), no maturation date (cannot become due during a homeowner’s life time).
Could be a financial tool to help heirs avoid some of the real estate tax.
Your heirs might be able to claim the interest from your mortgage on their own income taxes after your death. (Be sure to speak to your income tax advisor for recommendations.)

Those were the pros, the good things. Super simple, no? Of course the loan officer starts off with the good stuff. Here are the cons:

The CONS of Reverse Mortgages:
A Reverse Mortgage features all of the typical settlement costs one finds with a normal mortgage. Nonetheless, they could be more costly. There’s FHA mortgage insurance and additional settlement costs, but those expenses are typical of any FHA mortgage.
You might not leave much if anything for your heirs with a reverse mortgage. A Reverse Mortgage really is a rising debt loan because you are not making mortgage payments. It’s the complete opposite of a standard mortgage where equity increases as mortgage payments are made.
Selling your house can provide a larger return on your investment than a Reverse Mortgage.
Moving from your house in less than five years tends to make a Reverse Mortgage unwise. It doesn’t make good sense to use a Reverse Mortgage short term.
If you fail to pay your real estate taxes or homeowner’s insurance or can’t maintain the home, the lender might call for repayment of the debt. (Loan providers, however, will work with you to cure the default.)
If you aren’t living in your primary residence for a period surpassing Twelve consecutive months, the Reverse Mortgage is set to become due. (Nursing facilities, assisted living, moving, etc.)
You might not be eligible for needs based programs and assistance such as Medicaid.

When NOT to get a Reverse Mortgage:
An equity loan might be a lower priced way to get cash out of your home.
{If your major intention is repairing your house, a community grant may work better.|In the event you simply need to add a roof, windows or other energy efficient options. If that is the case, funds and assistance might be available. Go here for more reverse mortgage information.
For anyone who is ill and assisted living or a nursing home is approaching, don’t choose a Reverse Mortgage.
When your family says you ought not get a reverse mortgage, listen to them and have a meaningful discussion with them and the loan officer, together.
If your kids ask you to move in with them, this can be a wonderful option to remaining in your own home.
A homeowner whose house uses more than 25% of the overall liveable space for their company won’t be eligible for an FHA Reverse Mortgage.