Reverse Mortgages Pros & Cons

 

Advantages

1.      You Can Remain independent
A reverse mortgage allows you to remain in your
home and retain home ownership.

2.       You Can Stay in your Home
and retain home ownership.

3.       No monthly mortgage payments
You need not pay back the reverse mortgage
loan nor make any monthly mortgage payments
until
you permanently move out of the home.

4.       Tax-free money
Because the money you receive from a reverse mortgage is not considered income, it is tax free
and will not affect your Social Security or Medicare benefits.

5.       Freedom and flexibility
The money you get from a reverse mortgage is
yours to use in any way you choose.

 

Disdvantages

 

1.      Lenders generally charge high origination fees and other closing costs for a reverse mortgage.
 

2.      Lenders may charge servicing fees during the term of the mortgage.
 

3.      The amount you owe on a reverse mortgage generally grows over time.
 

4.      Interest is charged on the outstanding balance and added to the amount you owe each month.
 

5.      Reverse mortgages can use up all or some of the equity in your home, leaving fewer assets for you and your heirs.
 

6.      Interest on reverse mortgages is not deductible on income tax returns until the loan is paid off in part or whole.