Pros
- Remain in your memory-filled home
- Pay off your existing mortgage
- Receive additional retirement funds paid from your home’s equity
- Enjoy funds that are not taxed
- Postpone touching your retirement funds, pension, or Social Security
- Out of pocket costs are minimal since fees and insurance can often be financed into loan
- Never pay loan back out of pocket (once loan is due, you sell the home to pay the loan — never owe more than it’s worth)
- After the loan is repaid, any remaining equity belongs to you or your heirs
Cons
- Not all properties qualify (because you must live in the home as your primary residence, investment properties and vacation homes do not qualify)
- Fees are involved (just as they were when you took out a mortgage)
- Loan balance grows over time, which may limit your heirs’ inheritance
- Medicaid and other need-based government assistance can be affected if too many funds are withdrawn (and not spent) in one month
- The loan will become due if the homeowner fails to pay their property taxes or homeowners insurance, or fails to maintain the property
Our recommended approach
The best way to understand a reverse mortgage is to talk through requirements with a licensed professional. At American Financing, we have salary-based mortgage consultants. So, you can expect simple, straightforward, and honest conversations. Why not see if a reverse mortgage is for you?
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