If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. Would it be smart to sign up for a reverse mortgage? Can the federal government take my home? Who is on title, me, the lender, the us government or perhaps all of us? Those are fantastic questions that all have answers. Other areas of life have positives and negatives. Making a decision about a reverse mortgage is no different. Obviously you need to educate yourself about the options you have as well as the pros and cons of a reverse.

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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 reverse mortgage equity loansĀ  here.
As long as there is equity in the home, depending on your initial qualifications and growth, you can make changes to the way you access the homes equity. The remainder of the Line of credit grows every month at 1.25% over the current interest rate. A great option for those that wish to remain in there home.
Relocating may cause psychological hardship for many senior home owners. Memories were made in your “home sweet home”, and close proximity to loved ones and residing in your community may be a good 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 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 your Reverse Mortgage repeatedly as long as there is remaining 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 off the mortgage debt, additionally, the debt does not pass to your heirs or your estate. The house stands for the debt (non-recourse loan).
Reverse Mortgages have several safe practices: capped rates, a restriction on fees, HUD counseling, asset protection (non-recourse loan), no maturation date (cannot become due during a homeowner’s lifetime).
Beneficiaries could get a tax break when the home is sold and the interest is all paid at once.
Your beneficiaries might be able to claim the interest from your mortgage on their income taxes after your death. (Be sure to consult your income tax advisor for information.)

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 Negatives 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.
In the event that all you are leaving for an inheritance is your home, there may or may not be equity for you to leave behind. A Reverse Mortgage really is a increasing debt loan because you are not making mortgage payments. It is the complete opposite of a conventional home loan where equity will increase as mortgage payments are made.
You’ll typically net more money from the sale of your property than you’ll with a reverse mortgage.
Moving from your house in under 5 years tends to make a Reverse Mortgage unwise. 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 fail to maintain the home, the mortgage company might call for repayment of the debt. (Loan providers, however, will probably work with you to cure the default.)
If you’re not residing in your primary residence for a period exceeding Twelve consecutive months, the Reverse Mortgage is set to become due. (Assisted living facilities, assisted living, moving, etc.)
You may not be entitled to needs based programs and assistance such as Medicaid.

When NOT to get a Reverse Mortgage:
If you happen to only need temporary access to cash and equity.
{In the event your main intention is improving your house, a community gift may work far better.|If you only 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.
In case you are ill and assisted living or a elderly care facility is imminent, you should not choose a Reverse Mortgage.
When family members believe that a senior reverse mortgage isn’t really a wise decision, start thinking about their suggestions and keep an open mind; they’ve got your best needs in mind.
If your kids encourage you to move in with them, this can be an excellent alternative to remaining in your own house.
If you use the property for agriculture.