If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. Is it a bad idea or a wise course of action to get a reverse mortgage loan? Could I lose my home? With a reverse mortgage loan the lender gets the home, not my loved ones, when I pass away, right? Those are all very serious and really good questions. There are a myriad of good and bad points in every decision. Making a decision about a reverse mortgage is no different. In order to aid you in your fact gathering journey I have included a huge amount of information for you.

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Benefits 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 reverse mortgage loansĀ  here.
As long as there is equity in your house, depending on your initial qualifications and growth, you could make changes to the way you access the homes equity. One of the really cool features in regards to 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 senior citizens to be able to remain in their home and be able to afford to pay for care for themselves and the property.
Moving can cause emotional turmoil for a lot of elderly homeowners. Memories were created in your “home sweet home”, and close proximity to loved ones and remaining in your town could be a better choice.
You do not have to own you home free and clear to qualify for a reverse mortgage. There are no out of pocket expenses besides the appraisal fee and HUD counseling. Some HUD counseling organizations might 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 only refinance into another reverse mortgage if you’re getting a 5 to 1 ratio. To meet the requirements you will need to gain access to $5 of equity for every $1 of cost for the new loan.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
This is what is known as a non-recourse loan. In other words, you have no personal responsibility for this loan, neither does your estate or your heirs.
Reverse Mortgages have numerous safe practices: capped rates, a limitation on fees, HUD counseling, asset protection (non-recourse loan), no maturation date (cannot become due during a borrower’s life time).
Can be a financial tool to help beneficiaries avert some of the real estate tax.
Your beneficiaries may be able to claim the interest from your mortgage on their income taxes after your passing. (Be sure to consult your income tax advisor for help.)

Those were the pros, the good things. Pretty easy, right? Of course the loan officer starts off with the good stuff. Here are the cons:

The Negatives of Reverse Mortgages:
A Reverse Mortgage includes all of the regular closing costs one finds with a regular mortgage loan. Nonetheless, they could be more costly. There’s FHA mortgage insurance and additional closing costs, however those charges are standard of any FHA mortgage.
In the event that whatever you are leaving for an inheritance is your home, there may or may not be equity for you to leave behind. 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 will increase as mortgage payments are made.
Selling your property can often supply a larger return on your investment than a Reverse Mortgage.
Moving from your home in under five years tends to make a Reverse Mortgage risky. It doesn’t make good sense to use a Reverse Mortgage short term.
If you’re unable to pay your real estate taxes or homeowner’s insurance or can’t maintain your home, the mortgage company may require repayment of the debt. (Financial institutions, however, will probably work with you to cure the default.)
If you’re not residing in your main residence for a period exceeding beyond 12 consecutive months, the Reverse Mortgage will end up due. (Nursing homes, 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:
An equity loan could be a more affordable way to get cash out of your property.
{In the event your major goal is fixing up your house, a community loan may work much better.|For those who just need to add a roof, windows or other energy efficient options. If that is the case, subsidies and assistance might be available. Go here for more reverse mortgage information.
In case you are ill and assisted living or a elderly care facility is imminent, you should not choose a Reverse Mortgage.
If family and friends suggest that a senior reverse mortgage isn’t really a great option, give some thought to their suggestions and keep a balanced view; they’ve got your best interests in mind.
If your children ask you to move in with them, this may be the optimal solution to staying in your own home.
A homeowner whose property uses more than 25% of the total living space for their business enterprise isn’t going to be able to get an FHA Reverse Mortgage.