Pros of Reverse Mortgages(RM):

o RM, Allows the homeowner to stay in the home

o RM, Can pay off existing mortgages on the home.

o RM, Simple to qualify for as there aren't any minimum credit score and generally no income requirements.

o With RM no monthly mortgage payments are due for as long as the homeowner lives in the home and meets requirements for maintenance and paying property taxes and insurance.

o The homeowner receives payments on flexible terms: Credit line for emergencies

o Monthly payments

o Lump sum distribution

Any combination of the above

o A reverse mortgage cannot get "upside down" so the heirs will never be personally liable for more than the home is sold for.

o Heirs inherit the home and keep any remaining equity after the balance of the reverse mortgage is paid off.

o Loan proceeds are not taxable.

o The interest rate may be lower than traditional mortgages and home equity loans.

Cons of Reverse mortgages:

o The fees on a reverse mortgage are the same as a traditional FHA mortgage but are higher than a conventional mortgage because of the insurance cost. The largest costs are:

o FHA mortgage insurance

o Origination fee

o The loan balance gets larger over time and the value of the estate/inheritance may decrease over time.

o Although Social Security and Medicare are not affected, Medicaid and other need-based government assistance can be affected if too much funds are withdrawn (and not spent) in one month.

o The Reverse Mortgage program is not easy to understand.

Contact me anytime via email or phone, as we are extremely well versed in the Reverse mortgage area....Ralph@absolutelowrates.com or 954-274-7725