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 home get foreclosed on with a reverse mortgage? “Now the lender is going to be on the title of my property, not me, correct?” Those are wonderful questions that all have answers. With many choices in life, you have to determine what makes the most sense. This is also true with a reverse mortgage loan. So here are a few things that may help you if you are seeking info on Reverse Mortgages:

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The PROS 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 your options with a reverse mortgageĀ  here.
You aren’t bound to the decision you initially make. You can make modifications to the way you obtain equity from your home at any time, assuming equity remains. Line of credit grows on a monthly basis at 1.25% over the current rate. An excellent choice for retirees who would like to remain in familiar surroundings and in the same area where they have lived for years.
Moving might cause emotional problems for a lot of elderly home owners. Memories were made in your “home sweet home”, and close proximity to loved ones and residing in your town can be a better choice.
Reverse Mortgages can satisfy your current mortgage or financial obligations, though your financial obligations are transferred to your Reverse Mortgage balance. (Your house does not have to be free and clear to qualify.) Generally, the only out of pocket fees you will have are the HUD counseling fee and the appraisal. But other costs may apply depending upon 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 only refinance into an additional reverse mortgage if you’re getting a 5 to 1 ratio. To qualify you will need to gain access to $5 of equity for every $1 of cost for the new loan.
Upon the sale of your property you’ll never owe more than the home is worth.
Your financial assets cannot be attached to pay off the mortgage debt, additionally, the debt will not pass to your heirs or your estate. The house represents the debt (non-recourse loan).
There are lots of great options with this loan such as the loan fees are limited and interest rates are capped.
Might be a financial tool to help heirs avert a few of the real estate tax.
Your heirs might be able to claim the interest from your mortgage on their income taxes after your passing. (Make sure you consult your income tax advisor for guidance.)

Now, those are the pros. 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 priced than a conventional mortgage 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. A Reverse Mortgage really is a growing debt loan since you’re not making mortgage payments. It’s the complete opposite of a standard mortgage loan where equity increases as mortgage payments are made.
Selling your home will provide a larger return on your investment than a Reverse Mortgage.
Moving from your house in under five-years makes a Reverse Mortgage risky. It doesn’t make good sense to use a Reverse Mortgage short term.
If you fail to pay your real estate taxes or homeowner’s insurance or can’t maintain the home, the bank might call for repayment of the debt. (Loan providers, however, will certainly work with you to cure the default.)
The mortgage company can also begin the foreclosure process if you have not lived in the home for 12 straight months.
Medicaid might be affected, and you may not qualify for benefits until you spend down your Reverse Mortgage proceeds every month. (Check with your attorney and Medicaid for info.)

When NOT to obtain a Reverse Mortgage:
If you only need short term access to cash and equity.
{In the event your major goal is fixing up your home, a community loan 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, funds and assistance might be available. Go here for more reverse mortgage information.
For anyone who is ill and assisted living or a nursing home is approaching, do not choose a Reverse Mortgage.
When family and friends suggest that a senior reverse mortgage is not a good option, start thinking about their recommendations and maintain an open mind; they have your best needs at heart.
Should you have other options such as moving in with friends and family or the capacity to pay for senior living facilities.
A home-owner whose residence uses in excess of 25% of the overall living space for their business will not be able to get an FHA Reverse Mortgage.