If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. Should I or shouldn’t I get a reverse mortgage? Can I lose my home? Who is on title to the property when you get a reverse mortgage? Those are all very serious and really good questions. Many things in life have benefits and drawbacks. This is also true with a reverse mortgage loan. Below is a variety of information about reverse mortgage for you to consider.

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The PROS 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 mortgagesĀ  here.
You aren’t bound to the decision you initially make. You can make changes to the way you get funds from your home at any time, assuming equity remains. The unused portion of the Line of credit increases on a monthly basis at 1.25% over the current interest rate. 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.
Relocating may cause psychological turmoil for many senior home owners. Memories were made within your “home sweet home”, and close proximity to loved ones and remaining in your town can be a better choice.
Reverse Mortgages can satisfy your existing mortgage or financial debt, though your debts are transferred to your Reverse Mortgage balance. (Your home doesn’t have to be free and clear to qualify.) There are no out of pocket costs apart from the appraisal fee and HUD counseling. Some HUD counseling companies will waive the fee.
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 are 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.
You can never owe any more than the property is valued at.
This is what 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 safety measures: capped interest rates, a limitation on fees, HUD counseling, asset protection (non-recourse loan), no maturity date (cannot become due within a homeowner’s life-time).
Beneficiaries may get a tax break once the house is sold and the interest is all paid at once.
Your beneficiaries may be able to claim the interest from your mortgage on their income taxes after your death. (Make sure you consult your income tax advisor for guidance.)

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

The Negatives of Reverse Mortgages:
They can and frequently are more expensive than a traditional mortgage loan. However, you can’t really compare them as they are very different loan products.
If 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 growing debt loan because you are not making mortgage payments. It’s the complete opposite of a typical mortgage where equity will increase as mortgage payments are made.
Selling your house can often produce a larger return on your investment than a Reverse Mortgage.
Moving out of your house in less than 5 years tends to make a Reverse Mortgage risky. It does not make good sense to use a Reverse Mortgage short term.
If you fail to pay your real estate taxes or homeowner’s insurance or fail to maintain your home, the lender might call for repayment of the debt. (Lenders, however, will certainly work with you to cure the default.)
The lender can also begin the foreclosure process if you haven’t lived in the home for Twelve consecutive months.
You may not qualify for needs based programs and help such as Medicaid.

When NOT to obtain a Reverse Mortgage:
An equity loan could be a more affordable way to get cash out of your property.
{When your major goal is repairing your home, a community gift may work much better.|For those who simply 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.
If you know you’re going to be moving into an assisted living facility in the very near future.
When family members believe that a senior reverse mortgage is not a great choice, start thinking about their recommendations and maintain a balanced view; they have your best interests at heart.
Should you have other options such as moving in with family and friends or the capacity to pay for senior living facilities.
A homeowner whose residence makes use of in excess of 25% of the complete liveable space for their company will not be able to get an FHA Reverse Mortgage.