I meet with seniors that own a house and are seriously considering getting a reverse mortgage or at the very least, are curious about them. Is it an awful idea or a wise course of action to get a reverse mortgage loan? Can my property get foreclosed on with a reverse mortgage? With a reverse mortgage loan the financial institution receives the home, not my family, once I pass away, correct? These are legitimate concerns. With many choices in life, you need to decide what makes the most sense. Making a decision about a reverse mortgage is no different. Needless to say you need to inform yourself about the options you have along with the pros and cons of a reverse.

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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 reverse mortgagesĀ  here.
You’ll be able to modify your plan anytime from a line of credit, cash out, monthly checks, or a combo (based on what remains). The unused portion of the Line of credit increases on a monthly basis at 1.25% over the current interest rate. This is a way for many senior citizens to be able to remain in their home and be able to afford care for themselves and the property.
Moving might cause psychological chaos for a lot of senior homeowners. Memories were created in your “home sweet home”, and close proximity to loved ones and remaining in your community may be a better option.
Reverse Mortgages can satisfy your existing mortgage loan or debts, though your financial obligations are moved to your Reverse Mortgage balance. (Your house doesn’t have to be free and clear to qualify.) 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 refinance out of the reverse mortgage into a traditional loan presuming you qualify and there is equity in your home.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
This is what is referred to as a non-recourse loan. This means that, you have no personal responsibility for this loan, neither does your estate or your heirs.
There are numerous awesome options with this home loan such as the loan fees are limited and interest rates are capped.
Could be a financial tool to help heirs avoid a few of the real estate tax.
Your heirs could possibly claim the interest from your mortgage on their own income taxes after your passing. (Make sure you consult your income tax advisor for recommendations.)

Those were the pros, the good things. Pretty easy, 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 has lots of the normal settlement costs you find with a normal mortgage. Nevertheless, they may be more expensive. There’s FHA mortgage insurance and extra settlement costs, yet those costs are standard of any FHA mortgage.
You might not leave much if anything for your heirs with a reverse mortgage. A Reverse Mortgage is a growing debt loan since you’re not making mortgage payments. It’s the opposite of a typical mortgage where equity increases as mortgage payments are made.
You will typically net more money from the sale of your property than you’ll with a reverse mortgage.
These financing options really don’t make sense 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 haven’t resided in the home for Twelve consecutive months.
Medicaid could be affected, and you may not be eligible for benefits until you spend down your Reverse Mortgage proceeds each month. (Seek advice from your attorney and Medicaid for info.)

When NOT to get a Reverse Mortgage:
If you happen to only need short-term access to cash and equity.
{When your primary intention is repairing your home, a community gift may work much better.|In the event you only 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 know you are likely to be moving into an assisted living facility in the very near future.
If family and friends suggest that a senior reverse mortgage isn’t really a good option, take into consideration their suggestions and keep an open mind; they’ve got your best interests at heart.
Should you have other options such as moving in with relatives and buddies or the capacity to spend money on senior living facilities.
If you are using the house for agriculture.