I meet with baby boomers that own a home and are very seriously considering getting a reverse mortgage or at the very least, are curious about them. Should I or shouldn’t I get a reverse mortgage? Can my home get foreclosed on with a reverse mortgage? With a reverse mortgage the lender receives the home, not my family, once I pass away, right? Those are some of the most common concerns that I hear, There are a myriad of advantages and drawbacks in every decision. The same holds true with a reverse mortgage loan. So here are a few things that may help you if you are seeking facts about Reverse Mortgages:

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The PROS of Reverse Mortgages: (also called HECM – heck-uhm)
More cash flow guaranteed through the Government which continues provided that your home is your primary residence. You can learn more about your options with a reverse mortgageĀ  here.
You are not tied to the decision you initially make. You could make modifications to the way you obtain funds from your home at any time, assuming equity remains. One of several awesome 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%. This is a way for many seniors to be able to stay in their home and be able to afford to pay for care for themselves and the property.
Moving might cause emotional hardship for a lot of elderly homeowners. Memories were created inside your “home sweet home”, and close proximity to loved ones and residing in your area can be a better option.
You do not have to own you home free and clear to qualify for a reverse mortgage. 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 only refinance into another reverse mortgage if you’re getting a 5 to 1 ratio. To meet the requirements you need to gain access to $5 of equity for every $1 of cost for the new loan.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
Your financial assets can not be attached to pay off the mortgage debt, and the debt will not pass to your heirs or your estate. The home stands for the debt (non-recourse loan).
Reverse Mortgages have many safe practices: capped rates, a restriction on fees, HUD counseling, asset protection (non-recourse loan), no maturation date (cannot become due within a homeowner’s life-time).
Can be a financial tool to help heirs avert a portion of the real estate tax.
Your heirs may be able to claim the interest from your mortgage on their own income taxes after your death. (Make sure you speak to your income tax advisor for information.)

Now, those are 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 Negatives of Reverse Mortgages:
A Reverse Mortgage includes all of the regular settlement costs you find with a standard mortgage. However, they could be more expensive. There is FHA mortgage insurance and additional settlement costs, yet those costs are normal of any FHA mortgage.
A Reverse Mortgage can decrease your kid’s as well as grandchildren’s inheritance. A Reverse Mortgage is a rising debt loan since you’re not making mortgage payments. It is the complete opposite of a standard mortgage where equity increases as mortgage payments are paid.
You’ll typically net more money from the sale of your property than you will with a reverse mortgage.
These financing options really don’t seem sensible if you are intending on moving in the future.
If you don’t pay your taxes or insurance the lender may foreclose on your home.
The bank can also begin the foreclosure process if you have not resided in the home for 12 consecutive months.
You might not be entitled to needs based programs and assistance such as Medicaid.

When NOT to get yourself a Reverse Mortgage:
An equity loan are often less costly way of getting cash out of the home.
{If your primary objective is fixing up your home, a community grant may work much better.|If you just need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance might be available. Go here for more reverse mortgage information.
If you know you’re going to be moving into an assisted living facility in the very near future.
In the event 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 the perfect option to residing in your own home.
If you are using the home or property for farming.