I talk to senior homeowners daily who have tons of questions about the efficacy of Reverse Mortgages. “Is this a good idea in my situation?” Can my house get foreclosed on with a reverse mortgage? Who’s on title to the property when you are getting a reverse mortgage? Those are all very serious and very good questions. Many things in life have advantages and disadvantages. In terms of getting a reverse mortgage, some serious thinking and decisions will need to be made. Needless to say you need to educate 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)
Increase your monthly cash flow for life or for a specified term. You can learn more about reverse mortgage equity loansĀ  here.
As long as there is equity in the home, based on your initial qualifications and growth, you could make changes to the way you access the homes equity. The unused portion of the Line of credit increases monthly at 1.25% over the current rate. 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.
Moving can result in psychological chaos for many senior homeowners. Memories were created in your “home sweet home”, and close proximity to loved ones and remaining in your community might be a more sensible choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. Normally, the only out of pocket costs 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 live in your house regardless of what is owed on your Reverse Mortgage. You can’t ever be forced out of your home as long as 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 into a traditional loan presuming you meet the requirements and there is equity in your home.
Upon the sale of your home you’ll never owe more than the house is worth.
Your financial assets can not be attached to pay back the mortgage debt, and the debt will never pass to your heirs or your estate. The house stands for the debt (non-recourse loan).
There are numerous awesome options with this mortgage such as the fees being limited and interest rates are capped.
Heirs may get a tax break after the house is sold and the interest is all paid at once.
Your beneficiaries could possibly claim the interest from your mortgage on their own income taxes after your passing. (Make sure to speak to your income tax advisor for guidance.)

Now, those are the pros. Pretty easy, right? Now, I am sure you think that this is where I am going to stop. Fortunately for you I am going to share some of the bad things about reverse mortgages. Here are the cons:

The Disadvantages of Reverse Mortgages:
A Reverse Mortgage features all the common settlement costs you find with a normal mortgage loan. Nonetheless, they can be more costly. There is FHA mortgage insurance and extra settlement costs, but those costs are standard of any FHA mortgage.
A Reverse Mortgage can decrease your kid’s and 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 is the opposite of a typical mortgage loan where equity will increase as mortgage payments are paid.
Selling your house can supply a better return on your investment than a Reverse Mortgage.
These refinancing options really do not seem sensible if you are planning on moving in the future.
In the event that you do not pay your taxes or insurance the lender may foreclose on your house.
If you’re not residing in your main home for a period exceeding beyond 12 consecutive months, the Reverse Mortgage will end up 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 each month. (Check with your attorney and Medicaid for info.)

When NOT to obtain a Reverse Mortgage:
An equity loan can be a less expensive way of getting cash out of your house.
{If your primary intention is repairing your house, a community gift may work far better.|For those who only need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance might possibly be available. Go here for more reverse mortgage information.
Once you know you are going to be moving to an assisted living facility in the very near future.
In the event 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.
If your children encourage you to move in with them, this may be the perfect option to staying in your own property.
A home-owner whose home makes use of at least 25% of the complete living space for their business enterprise isn’t going to be able to get an FHA Reverse Mortgage.