A Reverse Mortgage is a loan that allows property owners, the age of 62 or above, a chance to turn their home equity into cash. This can be a very valuable tool for those in their retirement. It is also an opportunity to help with any need for financial assistance. This is true whether for medical expenses, home repairs, or even to travel the world. Therefore, at Mortgage South we will make sure to help you with every step, making sure the process is as simple as possible. However, knowing the reverse mortgage pros and cons will be of great help to you.
As with most financial decisions, there can be risks involved. On the other hand, it could benefit you in many ways. There is little risk, with a big reward. It all comes down to your specific situation and the different requirements involved with the loan.
Reverse Mortgage Pros and Cons
Pros
- Depending on how you planned for retirement, it can be a significant income reduction. So, it can be hard for some to balance their new way of living. However, a reverse mortgage can significantly help with your financial needs.
- The debt isn’t due until the borrower passes away or moves homes. For that reason, you or your heirs can sell the home or property to repay the debt and keep whatever is left over.
- There are no taxes on the income you receive from a reverse mortgage.
- A reverse mortgage is a way for you to be able to stay in your home. There are few costs that come with a reverse mortgage. However, it can be less in the long run than having to find a new place.
Cons
- There are costs and fees to a reverse mortgage. They can be added to the loan, but that can mean less equity for the borrower.
- If you are involved in other programs such as Medicaid and Social Security, it is possible that a reverse mortgage could violate the requirements for those programs. We can help you make sure you stay clear of requirement violations.
- There is a possibility of foreclosure if you fail to keep up with property taxes, homeowner’s insurance, or required HOA fees.
- If your status changes, such as moving or getting married, changes may occur with your reverse mortgage.
Contact Us Today
Give us a call at Mortgage South to find out more information on reverse mortgages. We can walk you through each step and go over all reverse mortgage pros and cons to see if any apply to your situation.
To explore your reverse mortgage options, call Mortgage South at (423) 624-3878.