I meet with senior homeowners that are thinking about getting a reverse mortgage. ”Is this the most suitable option for me and my spouse?” “Am I Going To lose my property? Who’s on title to the property once you get a reverse mortgage? Those are all very serious and very good questions. Other areas of life have advantages and disadvantages. Making a decision about a reverse mortgage is no different. In order to help you in your fact gathering quest I have included a huge amount of information for you.

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The PROS of Reverse Mortgages: (also called HECM – heck-uhm)
Increase your monthly cash flow for as long as you live in the home. You can learn more about your options with a reverse mortgageĀ  here.
Provided that there is equity in the house, depending on your initial qualifications and growth, you could make changes to the way you access the homes equity. The remainder of the Credit line grows larger monthly at 1.25% over the current interest rates. This is a way for many seniors to be able to stay in their home and be able to pay for care for themselves and the property.
Relocating may cause psychological hardship for a lot of senior homeowners. Memories were made inside your “home sweet home”, and close proximity to loved ones and remaining in your community might be a better option.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. There aren’t any out of pocket expenses besides the appraisal fee and HUD counseling. Some HUD counseling companies might waive the fee.
You’ll be able to remain in your home regardless of what is owed on your Reverse Mortgage. You’re never going to be forced out of your home providing your real-estate taxes and homeowner’s insurance are paid and as long as you maintain your home.
You can refinance out of the reverse mortgage right into a traditional loan presuming you meet the requirements and there is equity in your home.
You can never owe any more than the property is valued at.
Your assets can not be attached to repay the mortgage debt, additionally, the debt will never pass to your heirs or your estate. The home represents the debt (non-recourse loan).
Reverse Mortgages have several safety measures: capped mortgage rates, a limitation on fees, HUD counseling, asset protection (non-recourse loan), no maturity date (cannot become due within a homeowner’s lifetime).
Heirs can get a tax break once the property is sold and the interest is all paid at once.
Your beneficiaries may be able to claim the interest from your mortgage on their income taxes after your passing away. (Make sure to consult your tax advisor for help.)

Everybody likes the good stuff or the pros. Super simple, no? Of course the loan officer starts off with the good stuff. Here are the cons:

The CONS of Reverse Mortgages:
They can and often are more expensive than a traditional mortgage loan. However, you can’t really compare them as they are very different loan products.
You might not leave much if anything for your heirs with a reverse mortgage. Because you do not make payments with a reverse mortgage, you loan balance grows over time. As you loan balance grows it slowly eats up your equity. It’s the opposite of a conventional mortgage where equity will increase as mortgage payments are made.
Selling your house can supply a higher return on your investment than a Reverse Mortgage.
These financing options really do not make sense if you are planning on moving in the future.
If you’re unable to pay your real estate taxes or homeowner’s insurance or neglect to maintain the home, the lender might require repayment of the debt. (Lenders, however, will work with you to cure the default.)
If you are not residing in your primary residence for a period exceeding beyond Twelve consecutive months, the Reverse Mortgage is set to become due. (Assisted living facilities, assisted living, moving, etc.)
You won’t be entitled to needs based programs and help such as Medicaid.

When NOT to get yourself a Reverse Mortgage:
If you just need short-term access to cash and equity.
{If your main goal is repairing your home, a community grant may work much better.|For those who 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.
In case you are ill and assisted living or a nursing home is approaching, don’t choose a Reverse Mortgage.
When family and friends suggest that a senior reverse mortgage isn’t really a great choice, give some thought to their suggestions and preserve an open mind; they may have your best needs at heart.
For those who have other options such as moving in with friends and relations or the capability to spend money on senior living facilities.
If you use the home for farming.