If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. Should I or shouldn’t I get a reverse mortgage? Can I lose my home? With a reverse mortgage loan the financial institution gets the home, not my family, after I pass away, right? These are legitimate concerns. Many things in life have pros and cons. The same holds true with a reverse mortgage loan. Below is a variety of information about reverse mortgage for you to consider.

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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 loansĀ  here.
You aren’t stuck with the decision you initially make. You can make modifications to the way you receive equity from your home at any time, assuming equity remains. One of many awesome features about 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 those that wish to remain in there home.
Moving may cause psychological hardship for many senior home owners. Memories were made within your “home sweet home”, and close proximity to loved ones and residing in your community may be a better choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. 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 over and over again as long as there is remaining equity in your home.
You can never owe any more than the property is valued at.
Your financial assets may not be attached to pay back the mortgage debt, and the debt does not pass to your heirs or your estate. The house represents the debt (non-recourse loan).
There are lots of awesome features with this mortgage like the mortgage loan fees are limited and interest rates are capped.
Beneficiaries can get a tax break when the property is sold and the interest is all paid at once.
Your beneficiaries might be able to claim the interest from your mortgage on their income taxes after your death. (Make sure you speak to your tax advisor for recommendations.)

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 Disadvantages of Reverse Mortgages:
A Reverse Mortgage includes lots of the normal settlement costs you find with a standard home loan. However, they could be more costly. There is FHA mortgage insurance and additional settlement costs, but those expenses are normal of any FHA mortgage.
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 rising debt loan because you are not making mortgage payments. It is the complete opposite of a conventional home loan where equity increases as mortgage payments are made.
You will typically net more cash from the sale of your property than you will with a reverse mortgage.
These financing options really do not seem sensible if you are intending on moving in the future.
If you fail to pay your real estate taxes or homeowner’s insurance or aren’t able to maintain your home, the mortgage company might call for repayment of the debt. (Loan providers, however, will probably work with you to cure the default.)
If you aren’t residing in your main residence for a period exceeding beyond Twelve continuous months, the Reverse Mortgage will end up due. (Assisted living facilities, assisted living, moving, etc.)
You might not be eligible for needs based programs and help such as Medicaid.

When NOT to obtain a Reverse Mortgage:
If you happen to only need short-term access to cash and capital.
{In the event your main intention is improving your house, a community loan may work much better.|If you simply need to add a roof, windows or other energy efficient options. If that is the case, subsidies and assistance might be available. Go here for more home equity conversion mortgage information.
If you know you are going to be moving to an assisted living facility in the very near future.
When family and friends suggest that a senior reverse mortgage isn’t really a great option, take into consideration their recommendations and preserve an open mind; they’ve got your best interests at heart.
Should you have other options such as moving in with friends and family or the capacity to spend money on senior living facilities.
A home-owner whose property utilizes in excess of 25% of the overall liveable space for their home business will not be able to get an FHA Reverse Mortgage.