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 I lose my home? Whose property is it truly once I get a reverse mortgage? Those are some of the most typical thoughts that I hear, Many things in life have positives and negatives. Making a decision about a reverse mortgage is no different. So here are some things that may help you if you want information on Reverse Mortgages:

Check out these other pages: Del Paso, Rio Linda, Del Paso Heights, McClellan Park

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 mortgage home loansĀ  here.
Provided that 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 fantastic features concerning the line of credit it that the unused portion of the credit line grows at the current rate plus 1.25%. An outstanding option for those that wish to remain in there home.
Moving can cause psychological problems for a lot of elderly home owners. Memories were made within 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. 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 so long as there is remaining equity in your home.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
Your assets cannot be attached to pay back the mortgage debt, additionally, the debt will not pass to your heirs or your estate. The house represents the debt (non-recourse loan).
Reverse Mortgages have several safe practices: capped mortgage rates, a restriction on fees, HUD counseling, asset protection (non-recourse loan), no maturity date (cannot become due within a borrower’s life-time).
Can be a financial tool to help heirs avert some of the real estate tax.
Your heirs could possibly claim the interest from your mortgage on their own income taxes after your passing. (Make sure to consult your tax advisor for guidance.)

Those were the pros, the good things. Pretty easy, right? Sure, the dutiful old loan officer always gives you the good parts, but there are some things that may be drawbacks to Reverse Mortgages. Here are the cons:

The CONS of Reverse Mortgages:
A Reverse Mortgage features all the typical settlement costs one finds with a regular mortgage. Nevertheless, they could be more expensive. There is FHA mortgage insurance and extra settlement costs, however those charges are normal of any FHA mortgage.
A Reverse Mortgage can reduce your children’s as well as grandchildren’s inheritance. Because 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’s the complete opposite of a conventional mortgage where equity increases as mortgage payments are paid.
Selling your house can produce a larger bang for your buck than a Reverse Mortgage.
These loans definitely don’t seem sensible if you are intending on moving in the future.
If you don’t pay your real estate taxes or homeowner’s insurance or can’t maintain the home, the lender may require repayment of the debt. (Lenders, however, will certainly work with you to cure the default.)
The bank can also begin the foreclosure process if you have not resided in the home for Twelve straight months.
You may not be eligible for needs based programs and support such as Medicaid.

When NOT to obtain a Reverse Mortgage:
An equity loan is often a less costly way to get cash out of your home.
{If your main intention is upgrading your house, a community loan may work better.|If 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.
If you know you are going to be moving into an assisted living facility in the very near future.
When your family says you should not get a reverse mortgage, listen to them and have a meaningful discussion with them and the loan officer, together.
For those who have other options such as moving in with friends and family or the capability to pay for senior living facilities.
A property owner whose property makes use of more than 25% of the total living space for their business enterprise won’t be able to get an FHA Reverse Mortgage.