As seniors you are well aware that nothing in life is free and many things sound too good to be true. Just like everything in America, everything has it’s pros and cons in proceeding with anything. Believe it or not common sense is the hugest factor in deciding rather or not you as a senior should proceed. If it doesn’t make sense or doesn’t to you, then ask your loan specialist if they were in your shoes how would they proceed. Make sure they explain their reasoning well.
Some "pros" of receiving a reverse mortgage are as follows:
- The reverse mortgage program will allow you to release funds from your equity to help financially support your everyday living.
- The mortgage will does not have to be repaid as long you are living in that home as your primary residence
- The older you are the more equity you are able to access.
- Credit and income has no determination on the approval of the loan or the amount of money you qualify for.
- Government regulates the program's benefits, guidelines and fees.
- The cash proceeds you receive are non-taxable.
- If rates going down or your property value appreciates you may be eligible to refinance for more cash and/or a lower interest rate.
Some "cons" of receiving a reverse mortgage are as follows:
- Obtaining a reverse mortgage and turning your equity into liquid assets may disqualify you from some state and county assistance programs.
- Interest accrued is typically nlot deductible until the loan is paid or refinanced.
- The loan balance may be required to be paid in full if certain terms are violated, such as not paying property taxes or insurance
Above is a list of some very important facts on obtaining a reverse mortgage. It really comes down to you whether you need additional funds to better suit your lifestyle. A great advantage that you as a senior have is you have to speak with a counselor who is there for you to answer any financial questions that you have. Take advantage of their expertise. Don’t let the counselor make the decision for you though. Give a chance for the loan specialist to explain his views on the program. They deal with several seniors and have a lot of experience and should be able to cover the reverse mortgage pros and cons.