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? Could the us government take my home? With a reverse mortgage loan the bank receives the home, not my family, after I die, correct? These are authentic questions. There are a myriad of advantages and drawbacks in every decision. Making a decision about a reverse mortgage is no different. In order to assist you in your fact gathering journey I have included a huge amount of information for you.

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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 loansĀ  here.
You are able to modify your plan whenever you want from a line of credit, cash out, monthly checks, or a combo (depending on what remains). One of many awesome features concerning the line of credit it that the unused portion of the credit line grows at the current rate plus 1.25%. An excellent choice for retirees who want to live in familiar surroundings and in the same area where they’ve resided for years.
Moving can result in psychological chaos for many older home owners. Memories were made in your “home sweet home”, and close proximity to loved ones and remaining in your area can be a more sensible choice.
You do not have to own you home free and clear to qualify for a reverse mortgage. 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 regardless of what is owed on your Reverse Mortgage. You may never be forced from your home providing your real-estate taxes and homeowner’s insurance are paid and as long as you maintain your home.
You can only refinance into another reverse mortgage if you are getting a 5 to 1 ratio. To meet the requirements you need to get access to $5 of equity for every $1 of cost for the new loan.
Upon the sale of your home you won’t ever owe more than the home is worth.
Your assets can not be attached to pay off the mortgage debt, and the debt does not pass to your heirs or your estate. The home represents the debt (non-recourse loan).
Reverse Mortgages have numerous safeguards: capped interest rates, a restriction on fees, HUD counseling, asset protection (non-recourse loan), no maturation date (cannot become due during a borrower’s life time).
Beneficiaries can get a tax break once the property is sold and the interest is all paid at once.
Your heirs may be able to claim the interest from your mortgage on their own income taxes after your passing. (Make sure you consult your tax advisor for recommendations.)

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 Negatives of Reverse Mortgages:
A Reverse Mortgage features all of the standard closing costs one finds with a standard mortgage loan. Nonetheless, they can be more expensive. There’s FHA mortgage insurance and additional closing costs, but those costs are standard of any FHA mortgage.
You might not leave much if anything for your heirs with a reverse mortgage. A Reverse Mortgage is a growing debt loan because you are not making mortgage payments. It’s the complete opposite of a conventional mortgage loan where equity increases as mortgage payments are paid.
Selling your home will give you a better return on your investment than a Reverse Mortgage.
Moving from your home in less than five years tends to make a Reverse Mortgage imprudent. It doesn’t make good sense to use a Reverse Mortgage short term.
In the event that you do not pay your taxes or insurance the lender may foreclose on your home.
The mortgage company can also begin the foreclosure process if you have not resided in the home for 12 consecutive months.
You might not be eligible for needs based programs and support such as Medicaid.

When NOT to get yourself a Reverse Mortgage:
For those who just need short term access to cash and capital.
{When your primary goal is repairing your house, a community loan may work far better.|For those who only need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance might be available. Go here for more reverse mortgage information.
Should you be ill and assisted living or a nursing home is imminent, you should not choose a Reverse Mortgage.
When family members believe that a senior reverse mortgage isn’t really a good option, give some thought to their suggestions and preserve a balanced view; they may have your best needs at heart.
If your children encourage you to move in with them, this might be an excellent alternative to residing in your own home.
A property owner whose property utilizes more than 25% of the complete liveable space for their business enterprise isn’t going to be able to get an FHA Reverse Mortgage.