I speak with senior homeowners every day that have tons of questions regarding the efficacy of Reverse Mortgages. Would it be smart to take out a reverse mortgage? Could I lose my home? Whose property is it really after I get a reverse mortgage? Those are probably the most typical questions that I hear, Other areas of life have positives and negatives. The same holds true with a reverse mortgage loan. Below is a variety of information about reverse mortgage for you to consider.

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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 the options available with a reverse mortgageĀ  here.
You are not bound to the decision you initially make. You can make changes to the way you receive equity from your home at any time, assuming equity remains. The remaining Line of credit increases every month at 1.25% over the current interest rates. A great choice for baby boomers who wish to stay in familiar surroundings and in the same area where they’ve resided for years.
Relocating can result in psychological hardship for a lot of senior home owners. Memories were created in your “home sweet home”, and close proximity to loved ones and residing in your area can be a better option.
You do not have to own you home free and clear to qualify for a reverse mortgage. Commonly, the only out of pocket fees you will have are the HUD counseling fee and the appraisal. But other costs may apply based on the situation and type of property.
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 in to a traditional loan assuming you meet the requirements and there is equity in your home.
Upon the sale of your home you’ll never owe more than the home is worth.
This is what referred to as a non-recourse loan. To put it differently, you have no personal responsibility for this loan, neither does your estate or your heirs.
There are several awesome options with this home loan like the 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 own income taxes after your passing away. (Make sure to speak to your income tax advisor for advice.)

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 Negatives of Reverse Mortgages:
They can and often are more expensive than a conventional loan. However, you should not really compare them as they are very different loan products.
You might 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 complete opposite of a conventional home loan where equity will increase as mortgage payments are paid.
You will typically net more cash from the sale of your property than you will with a reverse mortgage.
These loans really do not make sense if you are intending on moving in the future.
If you don’t pay your real estate taxes or homeowner’s insurance or aren’t able to maintain the home, the mortgage company might call for repayment of the debt. (Financial institutions, however, will work with you to cure the default.)
If you aren’t residing in your primary home for a period surpassing 12 continuous months, the Reverse Mortgage will end up due. (Assisted living facilities, assisted living, moving, etc.)
You may not qualify for needs based programs and help such as Medicaid.

When NOT to get yourself a Reverse Mortgage:
If you happen to only need temporary access to cash and capital.
{In the event your main goal is fixing up your home, a community grant may work better.|If you simply need to add a roof, windows or other energy efficient options. If that is the case, subsidies and assistance might possibly be available. Go here for more reverse mortgage information.
If you are ill and assisted living or a an elderly care facility is coming up, you should not choose a Reverse Mortgage.
If family and friends suggest that a senior reverse mortgage isn’t really a wise decision, give some thought to their recommendations and maintain a balanced view; they may have your best needs in mind.
For those who have other options such as moving in with relatives and buddies or the capacity to spend money on senior living facilities.
A homeowner whose house utilizes at least 25% of the overall liveable space for their home business is not going to be eligible for an FHA Reverse Mortgage.