Reverse Mortgage Pros and Cons

We researched reverse mortgage pros and cons to help you understand it

Reverse Mortgage vs Selling your Home

As more homeowners become interested in reverse mortgages the decision they have to consider is wether selling their home will be a burdensome process.  If it is going to be too drastic of a task a reverse mortgage is a good idea.  Most folks would fit into that category. 

Wether you sell or take our a reverse mortgage you will be tapping into the equity you have built over the years.  Following are the pros and cons in taking a reverse mortgage:

Reverse Mortgage Pros
  • You can use your equity to supplement your retirement income
  • You can take a monthly payment to supplement your income
  • You can take a lump sum of cash if you want
  • You can take a lump sum of cash and a monthly check
  • You can take a monthly payment and have a line of credit you can write checks on as you need.
  • You can keep receiving payments for as long as you live
  • Your spouse will keep receiving the payments if he or she is still alive
  • You never have to sell your home even if you outlive the equity
  • The income you receive is tax free
  • A Reverse Mortage may be your only source for a comfortable retirement
Reverse Mortgage Cons
  • Cost.  Although the majority of the cost for a Reverse Mortgage goes to pay for insuring of the loan, it can cost over $10,000.  However, with the appreciation of homes recently it is not very significant compared to the potential benefit. 
  • You leave less equity for your children
  • If you choose the wrong program
No matter what you decide, you will have a much better idea of the overall costs — and benefits — of a Reverse Mortgage. Just remember one thing, your children want you to have a better life during your golden years, make your decision based on your needs not on wether you will leave something for them.  Chances are when you are gone there will be some equity left over for them!   Hope these Reverse Mortgage Pros and Cons helped.  Just make sure you get the facts before you take out a Reverse Mortgage.

reverse mortgage pros and cons
Get Reverse Mortgage facts before you cash out your home's equity!