I meet with baby boomers that own a home and are seriously considering getting a reverse mortgage or at the very least, are curious about them. ”Is this the best option for me and my spouse?” Can my home get foreclosed on with a reverse mortgage? Whose property is it really once I get a reverse mortgage? Those are all very serious and really good questions. Other parts of life have pros and cons. The same is true with a reverse mortgage loan. In order to assist you in your fact gathering journey I have included a huge amount of information for you.

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Benefits of Reverse Mortgages: (also called HECM – heck-uhm)
Increase your monthly cash flow for life or for a specified term. You can learn more about the reverse mortgage home loan optionsĀ  here.
Provided that 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. Among the list of fantastic features about 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 stay in there home.
Moving can result in psychological chaos for a lot of elderly homeowners. Memories were made inside your “home sweet home”, and close proximity to loved ones and remaining in your community could be a good choice.
Reverse Mortgages can satisfy your current mortgage or financial debt, though your debts are transferred to your Reverse Mortgage balance. (Your home does not have to be free and clear to qualify.) Generally, the only out of pocket fees you will have are the HUD counseling fee and the appraisal. But other costs may apply depending on the situation and type of property.
You can stay in your house regardless of what is owed on your Reverse Mortgage. You can’t ever 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 are able to refinance out of the reverse mortgage right into a traditional loan assuming you qualify and there is equity in your home.
You can’t ever owe any more than the property is valued at.
This is what known as a non-recourse loan. In other words, you have no personal responsibility for this loan, neither does your estate or your heirs.
There are lots of great features with this home loan like the mortgage loan fees being limited and interest rates are capped.
Might be a financial tool to help beneficiaries avoid 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 passing away. (Be sure to consult your income tax advisor for help.)

Now, those are the pros. Easy stuff right? Of course the loan officer starts off with the good stuff. Here are the cons:

The Disadvantages of Reverse Mortgages:
They can and frequently are higher priced than a conventional loan. However, you can’t really compare them as they are different loan products.
A Reverse Mortgage can cut your children’s as well as grandchildren’s inheritance. Since 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 standard mortgage loan where equity will increase as mortgage payments are paid.
Selling your property can often provide a higher bang for your buck than a Reverse Mortgage.
Moving out of your home in less than 5 years tends to make a Reverse Mortgage unwise. It does not make good sense to use a Reverse Mortgage short term.
In the event that you do not pay your taxes or insurance the lender may foreclose on your property.
The lender can also begin the foreclosure process if you have not lived in the home for Twelve straight months.
You won’t be eligible for needs based programs and assistance such as Medicaid.

When NOT to get a Reverse Mortgage:
For those who just need temporary access to cash and equity.
{In the event your major goal is improving your house, a community loan may work far better.|For those who only need to add a roof, windows or other energy efficient options. If that is the case, funds and assistance may be available. Go here for more reverse mortgage information.
For anyone who is ill and assisted living or a elderly care facility is imminent, don’t choose a Reverse Mortgage.
When your family says you should not get a reverse mortgage, listen to them and have a meaningful discussion with them and the loan officer, together.
For those who have other options such as moving in with relatives and buddies or the capability to pay for senior living facilities.
If you are using the house for agriculture.