If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. “Is this a good idea in my situation?” Can the federal government take my home? Whose home is it truly when I get a reverse mortgage? Those are all really good questions and provide a starting point to educate yourself regarding this loan. There are all sorts of advantages and drawbacks in every decision. This is also true with a reverse mortgage loan. Obviously 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.
You aren’t bound to the decision you initially make. You could make changes to the way you will get funds from your home at any time, assuming equity remains. The unused portion of the Line of credit grows larger each month at 1.25% over the current interest rate. An excellent choice for retirees who wish to live in familiar surroundings and in the same neighborhood where they’ve lived for years.
Relocating can cause psychological hardship for a lot of senior home owners. Memories were made within your “home sweet home”, and close proximity to loved ones and residing in your town may be a more sensible choice.
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.
It is possible to refinance out of the reverse mortgage right into a traditional loan presuming you qualify and there is equity in your home.
You can never owe any more than the property is valued at.
This is what referred to as a non-recourse loan. Put simply, you have no personal responsibility for this loan, neither does your estate or your heirs.
There are numerous nice options with this loan such as the mortgage loan fees being limited and interest rates are capped.
Can be a financial tool to help beneficiaries avoid a portion of the real estate tax.
Your beneficiaries could possibly claim the interest from your mortgage on their income taxes after your passing. (Be sure to consult your tax advisor for information.)

Everybody likes the good stuff or 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 Disadvantages of Reverse Mortgages:
They can and frequently are higher in price than a conventional loan. However, you should not really compare them as they are different loan products.
You may not leave much if anything for your heirs with a reverse mortgage. 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 typical mortgage loan where equity will increase as mortgage payments are paid.
You will typically net more money from the sale of your property than you’ll with a reverse mortgage.
These loans definitely don’t seem sensible if you are planning on moving in the future.
If you’re unable to pay your real estate taxes or homeowner’s insurance or fail to maintain your home, the bank may require repayment of the debt. (Financial institutions, however, will work with you to cure the default.)
The mortgage company can also begin the foreclosure process if you haven’t lived in the home for 12 consecutive months.
You might not be eligible for needs based programs and assistance such as Medicaid.

When NOT to obtain a Reverse Mortgage:
An equity loan are often lower priced way to get cash out of your house.
{In the event your major intention is upgrading your house, a community grant may work much better.|If you only need to add a roof, windows or other energy efficient options. If that is the case, subsidies and assistance may be available. Go here for more reverse mortgage information.
If you know you’re going to be moving to an assisted living facility in the very near future.
If 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 children ask you to move in with them, this can be a wonderful solution to residing in your own property.
If you are using the home for farming.