I meet with senior homeowners that are thinking about getting a reverse mortgage. Would it be a good idea to sign up for a reverse mortgage? Could the government take my home? Who’s on title to the property when you invest in a reverse mortgage? Those are all excellent questions and provide a starting point to learn more about this loan. Many things in life have pros and cons. In terms of getting a reverse mortgage, some critical thinking and decisions will have to be made. Obviously you need to educate yourself about the options you have along with 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 reverse mortgage equity loansĀ  here.
Provided that there is equity in your house, depending on your initial qualifications and growth, you can make changes to the way you access the homes equity. 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 outstanding option for those that wish to stay in there home.
Relocating can result in mental turmoil for many older home owners. Memories were made inside your “home sweet home”, and close proximity to loved ones and remaining in your community could be a good choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. There are no out of pocket expenses apart from the appraisal fee and HUD counseling. Some HUD counseling companies may waive the charge.
You’ll be able to stay in your house no matter what is owed on your Reverse Mortgage. You can never 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 can only refinance into another reverse mortgage if you are getting a 5 to 1 ratio. To qualify you will need to get access to $5 of equity for every $1 of cost for the new loan.
You can never owe any more than the property is valued at.
Your assets cannot be attached to pay back 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 several safe practices: capped rates, a restriction on fees, HUD counseling, asset protection (non-recourse loan), no maturity date (cannot become due within a homeowner’s life time).
Beneficiaries may get a tax break after the property is sold and the interest is all paid at once.
Your beneficiaries may be able to claim the interest from your mortgage on their income taxes after your passing. (Be sure to speak to your tax advisor for recommendations.)

Everybody likes the good stuff or the pros. Easy stuff right? 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 Disadvantages of Reverse Mortgages:
A Reverse Mortgage features all the normal settlement costs you find with a typical mortgage loan. Nevertheless, they could be more expensive. There’s FHA mortgage insurance and additional settlement costs, however those charges are standard of any FHA mortgage.
A Reverse Mortgage can decrease your kid’s along with grandchildren’s inheritance. A Reverse Mortgage is a growing debt loan since you are not making mortgage payments. It is the complete opposite of a standard mortgage loan where equity will increase as mortgage payments are paid.
You will typically net more money from the sale of your house than you’ll with a reverse mortgage.
Moving out of your residence in under five-years tends to make a Reverse Mortgage risky. It doesn’t make good sense to use a Reverse Mortgage short term.
If you don’t pay your real estate taxes or homeowner’s insurance or aren’t able to maintain the home, the lender might require repayment of the debt. (Lenders, however, will work with you to cure the default.)
The lending company can also begin the foreclosure process if you haven’t resided in the home for Twelve straight months.
You may not be eligible for needs based programs and help such as Medicaid.

When NOT to obtain a Reverse Mortgage:
If you happen to just need short-term access to cash and equity.
{In the event your major objective is fixing up your house, a community gift may work better.|If you only need to add a roof, windows or other energy efficient options. If that is the case, subsidies and assistance might possibly be available. Go here for more reverse mortgage home loan information.
Once you know you’re 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.
If you use the house for farming.