I meet with senior homeowners that are thinking about getting a reverse mortgage. ”Is this the best option for me and my spouse?” Can I lose my home? Who is on title to the property when you invest in a reverse mortgage? Those are all very serious and really good questions. Other parts of life have benefits and drawbacks. The same is true with a reverse mortgage loan. Below is a variety of information about reverse mortgage for you to consider.

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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 mortgagesĀ  here.
As long as 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. Line of credit increases on a monthly basis at 1.25% over the current interest rate. A great choice for seniors who wish to stay in familiar surroundings and in the same community where they have lived for years.
Moving can cause psychological turmoil for many older homeowners. Memories were created within your “home sweet home”, and close proximity to loved ones and residing in your area may be a better choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. There isn’t any out of pocket costs aside from the appraisal fee and HUD counseling. Some HUD counseling agencies will waive the charge.
You can stay in your house regardless of what is owed on your Reverse Mortgage. You’re never going to be forced out of your home so long as your real-estate taxes and homeowner’s insurance are paid and as long as you maintain your home.
It is possible to refinance your Reverse Mortgage again and again so long as there is remaining equity in your home.
After the sale of your property you’ll never owe more than the home is worth.
Your assets may not be attached to pay off the mortgage debt, and the debt does not pass to your heirs or your estate. The home represents the debt (non-recourse loan).
There are numerous really cool features with this loan like the loan fees being limited and interest rates are capped.
Beneficiaries may get a tax break after the home is sold and the interest is all paid at once.
Your heirs might be able to claim the interest from your mortgage on their income taxes after your passing away. (Be sure to consult your tax advisor for help.)

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

The Disadvantages of Reverse Mortgages:
A Reverse Mortgage features all of the common closing costs you find with a standard mortgage loan. Nonetheless, they can be more expensive. There’s FHA mortgage insurance and additional closing costs, but those expenses are standard of any FHA mortgage.
In the event that all you are leaving for an inheritance is your home, there may or may not be equity for you to leave behind. A Reverse Mortgage really is a rising debt loan because you are not making mortgage payments. It’s the complete opposite of a conventional mortgage loan where equity increases as mortgage payments are made.
Selling your house will supply a better bang for your buck than a Reverse Mortgage.
Moving out of your residence in less than five-years makes a Reverse Mortgage risky. It does not make good sense to use a Reverse Mortgage short term.
If you fail to pay your real estate taxes or homeowner’s insurance or aren’t able to maintain the home, the lender might require repayment of the debt. (Loan providers, however, will probably work with you to cure the default.)
The lender can also begin the foreclosure process if you haven’t lived in the home for 12 consecutive months.
Medicaid could be affected, and you may not be eligible for benefits unless you spend down your Reverse Mortgage proceeds each month. (Seek advice from your attorney and Medicaid for info.)

When NOT to get yourself a Reverse Mortgage:
If you just need short term access to cash and capital.
{When your primary goal is upgrading your house, a community grant may work far better.|For those who just need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance may be available. Go here for more reverse mortgage information.
If you are ill and assisted living or a nursing home is approaching, you should not choose a Reverse Mortgage.
If family and friends believe that a senior reverse mortgage is not a wise decision, take into consideration their suggestions and preserve a balanced view; they have your best interests in mind.
If your kids invite you to move in with them, this might be the optimal alternative to remaining in your own property.
If you use the home or property for farming.