Some of the Advantages of a Reverse Mortgage

• Get money out or pay down your current debt and make no payments
• Keep your home , keep your loan 
• Continues as long as one homeowner remains in home 
• Lender cannot require any payments with minimal homeowner obligations 
• Complete security
• No changes to your home's  title, just a mortgage lien 
• The added  money can assist you in maintaining your independence and security 
• You Remain in Control
• You make the call on  how much equity you will use 
• You manage how much of a pay out you take out of your equity 
• Conservative lending limits generally prevent you from using all of your home equity 
• Safety and Fairness
• Government designed, highly regulated, and extensively disclosed mortgage program 
• Independent counseling is always required before the loan process is complete 
• Fair and reasonable business transaction – lender is repaid only what it is owed

Some of the Disadvantages of a Reverse Mortgage

The layout you receive from a reverse mortgage is not "free" money. "There is no free lunch!"  The money they lend you is secured by a mortgage on your current home, they expect to be repaid what they have lent you...and of course the interest amount on that money. Bottom line is  "you get the money, the lender gets a guarantee that they’ll eventually be repaid."

A  reverse mortgage, will reduce the amount of equity in your home. A reverse mortgage amount IS a portion of your home equity. Inquire with a reverse mortgage lender for an amortization table to see how much a reverse mortgage affects your equity.

Reverse mortgages are more costly than standard home loans. The institution that is making the reverse mortgage lender is taking on the risk that you live to beyond the calculated age. With this increased risk comes a more generous return for the lender. Reverse mortgage lenders must wait for many, many years for repayment of any kind. 

"You'll lose your home!  You'll regret it. They're only for poor people. Only if you have no heirs."  The program is not for everyone, if you are considering a reverse mortgage, the smartest approach is to investigate it for yourself and then decide. Get the all the facts about reverse mortgages, a little knowledge will enable you to make an objective decision.

Reverse mortgage providers are sales people. Many have no idea what they are talking about. For most people however, the potential of saving a few bucks is not worth the risk to their health or their wallet when they end up a victim of the bait-and-switch. Use a reputable reverse mortgage lender in your area who gives you straight answers to your questions and does not promise you the world.

Typically you need a good amount of equity to qualify for a reverse mortgage. Reverse mortgage lenders do not offer you the full amount that your house is worth – after all, they're not buying your home.  After they do the math, this means that reverse mortgage lenders will usually only offer between 30% and 80% of the value of your home (80% is very rare). The exact amount depends on factors like, your age and which program you choose.

You do not have inexhaustible amounts of money, you may be fooled into the idea that the money will always be there. It is merely a means of tapping into the home equity that you do have.