If you own a home and are retired or close to retired, you’ve probably heard of Reverse Mortgages. This unique type of mortgage loan can be a smart financial planning move for some seniors, however it is not the right choice for all seniors. Here we
REVERSE MORTGAGE PROS
Regular Income – As long as you remain living in your home, your reverse mortgage will provide regular income that can help you meet living expenses.
No Early Repayment Demands – Your loan will stay current and active until you no longer live in the home, you sell the home or you pass away.
Tax Free Money – Since this is a loan, not income, the Internal Revenue Service (IRS) does not count the money you receive in formulas used to calculate your taxes or your Social Security Benefits.
You Remain the Homeowner – As with any mortgage, you still retain ownership of your home.
No Monthly Mortgage Payment – With a Reverse Mortgage you will not need to make monthly mortgage payments.
Multiple Payout Options – Reverse Mortgage’s provide a variety of options for receiving your payments. Click here to review the options Payout Options
REVERSE MORTGAGE CONS
You Must be at least 62 – Reverse Mortgages are designed to help seniors meet living expense while remaining in their home. To qualify for a Reverse Mortgage you must be at least 62 years old.
Many Costs Involved – There are many costs involved with obtaining a Reverse Mortgage including; Mortgage Insurance, Closing Costs, Origination Fees and Servicing Fees. You can include these costs as part of your loan but that will reduce the amount of money you receive.
your Heirs May Not Be Able to Keep the Home – When you pass away, your heirs have 6 months to pay off the Reverse Mortgage. Your heirs can refinance with a new mortgage or sell the home.
The Loan is Due if you Move– If you need to move to long term care or into a home with family to help with your care, you will need to pay off your loan.
You Can Still Lose Your Home to Foreclosure– While you will not need to make a monthly mortgage payment, you will need to pay property taxes, homeowner’s insurance and maintain the condition of the home.
