I meet with seniors that own a house and are very seriously considering getting a reverse mortgage or at the very least, are curious about them. Will it be an awful idea or a good idea to secure a reverse mortgage loan? Is It Possible To lose my home? With a reverse mortgage loan the lending company receives the home, not my family, when I die, correct? Those are excellent questions that all have answers. There are all sorts of advantages and drawbacks in every decision. Reverse Mortgages are no different. Needless to say you need to educate yourself about the options you have as well as the pros and cons of a reverse.

See these other pages: Leisureville Mobile Home Park, Idle Wheel Mobile Estates, Royal Palms Mobile Estates, Woodlands Mobile Home Park

The PROS of Reverse Mortgages: (also called HECM – heck-uhm)
Additional cash flow guaranteed by the Government which continues so long as your home is your primary residence. You can learn more about the reverse mortgage home loan optionsĀ  here.
You’ll be able to modify your plan at any time from a line of credit, cash out, monthly checks, or a combination (based on what remains). One of several awesome features about the line of credit it that the unused portion of the credit line grows at the current rate plus 1.25%. This is a way for many seniors to be able to stay in their home and be able to afford care for themselves and the property.
Relocating may cause psychological turmoil for many senior homeowners. Memories were made inside your “home sweet home”, and close proximity to loved ones and residing in your community may be a better option.
You do not have to own you home free and clear to qualify for a reverse mortgage. There isn’t any out of pocket costs other than the appraisal fee and HUD counseling. Some HUD counseling companies may waive the charge.
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 presuming you qualify and there is equity in your home.
You can’t ever owe any more than the property is valued at.
Your financial assets cannot be attached to pay back the mortgage debt, and the debt will not pass to your heirs or your estate. The home represents the debt (non-recourse loan).
There are numerous really cool options with this home loan such as the mortgage loan fees being limited and interest rates are capped.
Beneficiaries can get a tax break once the house is sold and the interest is all paid at once.
Your heirs could possibly claim the interest from your mortgage on their income taxes after your passing away. (Make sure you speak to your tax advisor for help.)

Those were the pros, the good things. 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:
They can and quite often are higher in price than a traditional loan. However, you can’t 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 complete opposite of a typical mortgage loan where equity will increase as mortgage payments are made.
You will typically net more money from the sale of your home than you’ll with a reverse mortgage.
These refinancing options really do not seem sensible if you are intending on moving in the future.
If you fail to pay your real estate taxes or homeowner’s insurance or fail to maintain your home, the bank may require repayment of the debt. (Loan providers, however, will work with you to cure the default.)
If you’re not residing in your primary home for a period exceeding beyond 12 consecutive 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 a Reverse Mortgage:
For those who only need short term access to cash and capital.
{If your major goal is repairing your home, a community grant may work better.|In the event you just need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance might be available. Go here for more reverse mortgage information.
Once you know you are going to be moving into an assisted living facility in the very near future.
If your family says you shouldn’t get a reverse mortgage, listen to them and have a meaningful discussion with them and the loan officer, together.
For those who have other options such as moving in with family and friends or the ability to pay for senior living facilities.
If you are using the property for agriculture.