I speak with senior homeowners daily that have tons of questions regarding the efficacy of Reverse Mortgages. “Is this a wise course of action for me?” Could the us government take my home? Who’s on title to the property when you get a reverse mortgage? Those are probably the most common questions that I hear, There are all sorts of good and bad points in every decision. Reverse Mortgages are no different. In order to aid you in your fact gathering quest I have included a ton of information for you.

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Benefits 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.
It is possible to change your plan at any time from the line of credit, cash out, monthly checks, or a combination (based on what remains). One of many really cool features about the line of credit it that the unused part of credit line grows at the current rate plus 1.25%. A good option for seniors who would like to remain in familiar surroundings and in the same community where they’ve resided for years.
Relocating can cause emotional problems for many older home owners. Memories were created in your “home sweet home”, and close proximity to loved ones and residing in your town could be a better choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. Typically, the only out of pocket costs 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’ll be able to remain in your home irrespective of what is owed on your Reverse Mortgage. You’re never going to be forced out of your home so long as your real-estate taxes and homeowner’s insurance are paid and as long as you maintain your home.
You are able to refinance out of the reverse mortgage into a traditional loan presuming you are eligible and there is equity in your home.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
Your assets may 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 many safe practices: capped interest rates, a limitation on fees, HUD counseling, asset protection (non-recourse loan), no maturation date (cannot become due within a borrower’s life time).
Could be a financial tool to help beneficiaries avoid a portion of the real estate tax.
Your beneficiaries could possibly claim the interest from your mortgage on their own income taxes after your death. (Make sure to speak to your income tax advisor for information.)

Everybody likes the good stuff or the pros. Super simple, no? Now, I am sure you think that this is where I am going to stop. Fortunately for you I am going to share some of the bad things about reverse mortgages. Here are the cons:

The Negatives of Reverse Mortgages:
They can and quite often are more expensive than a traditional mortgage loan. However, you can not really compare them as they are different loan products.
In the event that whatever you are leaving for an inheritance is your home, there may or may not be equity for you to leave behind. 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 opposite of a typical home loan where equity increases as mortgage payments are made.
You’ll typically net more money from the sale of your house than you will with a reverse mortgage.
Moving from your house in under 5 years makes a Reverse Mortgage imprudent. It doesn’t make good sense to use a Reverse Mortgage short term.
If you’re unable to pay your real estate taxes or homeowner’s insurance or can’t maintain the home, the lender may require repayment of the debt. (Financial institutions, however, will probably work with you to cure the default.)
The bank can also begin the foreclosure process if you haven’t resided in the home for Twelve consecutive months.
You may not be entitled to needs based programs and assistance such as Medicaid.

When NOT to get a Reverse Mortgage:
An equity loan are often more affordable way of getting cash out of the home.
{If your primary goal is upgrading your home, a community grant may work better.|For those who only need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance may be available. Go here for more reverse home loan lender information.
Once you know you are going to be moving into an assisted living facility in the very near future.
When family members suggest that a senior reverse mortgage is not a great choice, take into consideration their suggestions and preserve an open mind; they may have your best needs at heart.
For those who have other options such as moving in with relatives and buddies or the capability to spend money on senior living facilities.
If you use the property for agriculture.