I meet with baby boomers that own a home and are very seriously considering getting a reverse mortgage or at the very least, are curious about them. Is it a good idea to take out a reverse mortgage? Could the federal government take my property? Who is on title to the property once you get a reverse mortgage? These are definitely legitimate concerns. Other areas of life have advantages and drawbacks. The same holds true with a reverse mortgage loan. Below is a variety of information about reverse mortgage that you should consider.

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Benefits of Reverse Mortgages: (also called HECM – heck-uhm)
More cash flow guaranteed by the Government which continues provided that your home is your primary residence. You can learn more about reverse mortgage equity loans  here.
As long as there is equity in the home, based on your initial qualifications and growth, you can make changes to the way you access the homes equity. One of many fantastic features concerning the line of credit it that the unused portion of the credit line grows at the current rate plus 1.25%. A great choice for seniors who would like to stay in familiar surroundings and in the same area where they’ve lived for years.
Relocating might cause emotional turmoil for many older homeowners. Memories were created in your “home sweet home”, and close proximity to loved ones and residing in your community could 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’ll be able to stay in your house irrespective of what is owed on your Reverse Mortgage. You can never be forced out of your home as long as 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 qualify you need to gain access to $5 of equity for every $1 of cost for the new loan.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
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 several great options with this mortgage like the fees are limited and interest rates are capped.
Might be a financial tool to help heirs avert a few of the real estate tax.
Your heirs might be able to claim the interest from your mortgage on their own income taxes after your passing away. (Make sure to speak to your income tax advisor for help.)

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 Disadvantages of Reverse Mortgages:
They can and often are higher in price than a traditional loan. However, you can’t really compare them as they are different loan products.
If whatever you are leaving for an inheritance is your home, there may or may not be equity for you to leave behind. A Reverse Mortgage is a increasing debt loan because you are not making mortgage payments. It is the opposite of a conventional mortgage where equity will increase as mortgage payments are made.
Selling your property can often produce a better return on your investment than a Reverse Mortgage.
Moving from your residence in under five 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 bank might require repayment of the debt. (Lenders, however, will probably work with you to cure the default.)
If you’re not residing in your main residence for a period exceeding Twelve consecutive months, the Reverse Mortgage is set to become due. (Nursing facilities, assisted living, moving, etc.)
You might not qualify for needs based programs and support such as Medicaid.

When NOT to obtain a Reverse Mortgage:
An equity loan could be a cheaper way to get cash out of your property.
{When your main goal is improving your house, a community loan may work better.|In the event you just need to add a roof, windows or other energy efficient options. If that is the case, subsidies and assistance may 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 ought not get a reverse mortgage, listen to them and have a meaningful discussion with them and the loan officer, together.
If your children encourage you to move in with them, this may be a wonderful solution to remaining in your own home.
A property owner whose home makes use of in excess of 25% of the complete livable space for their business isn’t going to qualify for an FHA Reverse Mortgage.