If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. Will it be an awful idea or a wise course of action to get a reverse mortgage loan? “Will I lose my house? “Now the bank is going to be on the title of my property, not me, right?” Those are excellent questions that all have answers. With many choices in life, you need to determine what makes the most sense. Reverse Mortgages aren’t any different. Needless to say you need to inform 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 the options available with a reverse mortgageĀ  here.
You are not bound to the decision you initially make. You could make modifications to the way you get equity from your home at any time, assuming equity remains. One of many really cool features about 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 emotional hardship for many elderly homeowners. Memories were created in your “home sweet home”, and close proximity to loved ones and residing in your area might be a better option.
Reverse Mortgages can satisfy your existing mortgage or financial obligations, even though your financial obligations are transferred to your Reverse Mortgage balance. (Your house doesn’t have to be free and clear to qualify.) Typically, the only out of pocket fees you will have are the HUD counseling fee and the appraisal. But additional fees may apply based on the situation and type of property.
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 meet the requirements you will need to gain access to $5 of equity for every $1 of cost for the new loan.
After the sale of your home you won’t ever owe more than the house is worth.
This is what referred to as a non-recourse loan. In other words, you have no personal responsibility for this loan, neither does your estate or your heirs.
There are numerous really cool options with this mortgage like the loan fees being limited and interest rates are capped.
Might be a financial tool to help heirs avert a portion of the real estate tax.
Your heirs could possibly claim the interest from your mortgage on their income taxes after your death. (Make sure you consult your tax advisor for help.)

Now, those are the pros. Easy stuff 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 Disadvantages of Reverse Mortgages:
A Reverse Mortgage includes all of the normal closing costs one finds with a typical mortgage loan. Nonetheless, they can be more expensive. There is FHA mortgage insurance and extra closing costs, yet those expenses are normal of any FHA mortgage.
You might not leave much if anything for your heirs with a reverse mortgage. A Reverse Mortgage really is a growing debt loan since you are not making mortgage payments. It’s the complete opposite of a typical mortgage loan where equity will increase as mortgage payments are made.
Selling your home can often supply a better bang for your buck than a Reverse Mortgage.
These refinancing options really don’t seem sensible if you are intending on moving in the future.
In the event that you don’t pay your taxes or insurance the lender may foreclose on your home.
The mortgage company can also begin the foreclosure process if you haven’t lived in the home for Twelve straight months.
You might not be entitled to needs based programs and support such as Medicaid.

When NOT to get yourself a Reverse Mortgage:
If you only need short-term access to cash and capital.
{When your main goal is improving your house, a community gift may work better.|If you simply need to add a roof, windows or other energy efficient options. If that is the case, funds and assistance might possibly be available. Go here for more reverse mortgage information.
Once you know you are going to be moving to an assisted living facility in the very near future.
In the event 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.
If you have other options such as moving in with family and friends or the capability to pay for senior living facilities.
A home-owner whose residence uses at least 25% of the total living space for their business will not be eligible for an FHA Reverse Mortgage.