I meet with baby boomers that own a home and are seriously considering getting a reverse mortgage or at the very least, are curious about them. Should I or shouldn’t I get a reverse mortgage? Can my property get foreclosed on with a reverse mortgage? “Now the lender is going to be on the title of my property, not me, right?” Those are all very serious and really good questions. With many choices in life, you need to decide what makes the most sense. Making a decision about a reverse mortgage is no different. Below is a variety of information about reverse mortgage for you to give some thought to.

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Benefits of Reverse Mortgages: (also called HECM – heck-uhm)
Additional cash flow guaranteed through the Government which continues provided that your property is your primary residence. You can learn more about the reverse mortgage home loan optionsĀ  here.
As long as there is equity in the home, depending on your initial qualifications and growth, you could make changes to the way you access the homes equity. The unused portion of the Credit line grows larger on a monthly basis at 1.25% over the current rate. This is a way for many seniors to be able to stay in their home and be able to afford to pay for care for themselves and the property.
Relocating can cause psychological turmoil for many older home owners. Memories were made within your “home sweet home”, and close proximity to loved ones and residing in your town might be a more sensible choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. Almost all of the closing costs can be lumped into the loan with the exception of the counseling fee and appraisal.
You can live in your house irrespective of what is owed on your Reverse Mortgage. You can’t ever be forced out of your home providing your real estate taxes and homeowner’s insurance are paid and as long as you maintain your home.
You are able to refinance your Reverse Mortgage again and again provided that there is remaining 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. To put it differently, you have no personal responsibility for this loan, neither does your estate or your heirs.
There are several really cool options with this home loan like the loan fees are limited and interest rates are capped.
Might be a financial tool to help beneficiaries avoid some of the real estate tax.
Your beneficiaries could possibly claim the interest from your mortgage on their own income taxes after your passing away. (Be sure to speak to your income tax advisor for information.)

Everybody likes the good stuff or the pros. Easy stuff right? Of course the loan officer starts off with the good stuff. Here are the cons:

The Disadvantages of Reverse Mortgages:
They can and frequently are higher priced than a traditional mortgage loan. However, you can not really compare them as they are different loan products.
A Reverse Mortgage can reduce your children’s as well as grandchildren’s inheritance. 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 is the opposite of a standard mortgage loan where equity increases as mortgage payments are paid.
Selling your home can often give you a greater return on your investment than a Reverse Mortgage.
These financing options really don’t make sense if you are intending on moving in the future.
In the event that you don’t pay your taxes or insurance the lender may foreclose on your home.
The lender can also begin the foreclosure process if you have not lived in the home for 12 straight months.
Medicaid may be affected, and you may not qualify for benefits unless of course you spend down your Reverse Mortgage proceeds monthly. (Seek advice from your attorney and Medicaid for info.)

When NOT to get yourself a Reverse Mortgage:
An equity loan may be a cheaper way of getting cash out of your property.
{If your primary objective is upgrading your house, a community gift may work far better.|In the event 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 know you are going 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 wise decision, consider their suggestions and maintain an open mind; they may have your best interests in mind.
If your kids encourage you to move in with them, this can be the perfect option to staying in your own property.
A homeowner whose residence utilizes more than 25% of the total living space for their home business will not be eligible for an FHA Reverse Mortgage.