What Can You Do About pros and cons of reverse mortgage Right Now

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Pros and Cons of Reverse Mortgage:

Pros of Reverse Mortgages

pros
  • Provides flexible disbursement options (i.e. monthly or line of credit)
  • Homeowner stays in the home without making monthly mortgage payments*
  • Eliminate any existing mortgage
  • Heirs are not personally liable if payoff balance exceeds home value
  • Heirs inherit remaining home equity after paying off the reverse mortgage loan
  • Proceeds are not considered income or otherwise, though you must continue to pay required property taxes**
  • Interest rates may be lower than other options

Cons of Reverse Mortgages

cons
Value of estate inheritance may decrease over time as proceeds are spent and interest accrues on the loan balance Fees are typically higher than with a traditional mortgage, such as the following:
  • Initial Federal Housing Administration (FHA) mortgage insurance premium of 2% of the home value not to exceed $13,593
  • Ongoing annual FHA mortgage insurance premiums of .5% of the outstanding mortgage balance
  • Loan origination fee
Although a reverse mortgage loan generally does not affect eligibility for Social Security and Medicare, needs-based government programs such as Medicaid may be affected**
 Reverse mortgages are not well understood by many people
*You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance and maintain the home according to Federal Housing Administration requirements.
Failure to meet these requirements can trigger a loan default that may result in foreclosure.
 **Consult your financial advisor and appropriate government agencies for any effect on taxes or government benefits.

What are the main Requirements and Qualification For Reverse Mortgage?
Read This Guide To Learn More.
Source:
Location: United States

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