If you are thinking about getting a reverse mortgage, you more than like likely have a ton of questions. “Is this a good option for my situation?” Can the us government take my home? “Now the lending company is going to be on the title of my property, not me, correct?” Those are all very serious and really good questions. With many choices in life, you need to decide what makes the most sense. When it comes to obtaining a reverse mortgage, some serious thinking and decisions should 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 mortgagesĀ  here.
You are able to modify your plan at any time from the line of credit, cash out, monthly checks, or a combination (based on what remains). Among the list of really cool features in regards to the line of credit it that the unused portion of the credit line grows at the current rate plus 1.25%. This is a way for many senior citizens to be able to remain in their home and be able to afford to pay for care for themselves and the property.
Relocating can result in mental hardship for a lot of older homeowners. Memories were made within your “home sweet home”, and close proximity to loved ones and remaining in your area could be a good choice.
Get rid of your monthly mortgage payment and pay off those stubborn credit cards and other debt. Typically, the only out of pocket expenses you will have are the HUD counseling fee and the appraisal. But additional fees may apply depending on the situation and type of property.
You can stay in your home irrespective of what is owed on your Reverse Mortgage. You can never be forced from 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 refinance your Reverse Mortgage again and again as long as there is remaining equity in your home.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
Your assets can not be attached to pay back the mortgage debt, additionally, the debt will not pass to your heirs or your estate. The house stands for the debt (non-recourse loan).
Reverse Mortgages have many safe practices: capped rates, a restriction on fees, HUD counseling, asset protection (non-recourse loan), no maturity date (cannot become due during a borrower’s lifetime).
Might be a financial tool to help beneficiaries avoid some of the real estate tax.
Your beneficiaries may be able to claim the interest from your mortgage on their income taxes after your passing. (Make sure to consult your income tax advisor for recommendations.)

Those were the pros, the good things. Super simple, no? Of course the loan officer starts off with the good stuff. Here are the cons:

The CONS of Reverse Mortgages:
They can and frequently are higher in price than a traditional mortgage loan. However, you can not really compare them as they are different loan products.
You may not leave much if anything for your heirs with a reverse mortgage. A Reverse Mortgage really is a growing debt loan because you are not making mortgage payments. It is the opposite of a conventional home loan where equity increases as mortgage payments are made.
Selling your house will produce a better return on your investment than 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.
In the event that you don’t pay your taxes or insurance the lender may foreclose on your house.
The bank can also begin the foreclosure process if you have not lived in the home for 12 straight months.
Medicaid might be affected, and you may not be entitled to benefits unless of course you spend down your Reverse Mortgage proceeds every month. (Check with your attorney and Medicaid for info.)

When NOT to get a Reverse Mortgage:
An equity loan might be a less expensive way of getting cash out of your home.
{In the event your primary goal is fixing up your home, a community grant may work better.|If you only need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance might possibly be available. Go here for more reverse mortgages information.
Once you know you are going to be moving into an assisted living facility in the very near future.
If family members believe that a senior reverse mortgage is not a wise decision, take into consideration their recommendations and keep an open mind; they may have your best needs in mind.
Should you have other options such as moving in with friends and relations or the capability to pay for senior living facilities.
A homeowner whose home makes use of at least 25% of the complete livable space for their business isn’t going to qualify for an FHA Reverse Mortgage.