Is a Reverse Mortgage Right For You?

With the problem that we are going through with the economy these days, it is no surprise that more and more senior citizens are turning to reverse mortgages to help ensure that they can stay in their homes for the rest of their lives. But many of these senior citizens are getting into a reverse mortgage without understanding its benefits and pitfalls. Here are just a few of the pros and cons of a reverse mortgage so you can determine if this is the right avenue for you or your elderly loved ones.

A reverse mortgage may be a good idea for you if….
• You are planning to stay in your home for many years to come.
• You have no heirs to inherit your home after you are deceased or if you are not concerned about your home passing to another member after your family after you are deceased.
• You don’t have a steady income each month.
• You rely on your Social Security benefits to make your payments each month.
• You need expensive medical care and not having to pay your mortgage payments each month would be a great help financially.
• You want to sell your home in the future and you want to use the mortgage payments to make repairs and renovations to bring the house up to the current codes.
• You are worried about losing your home. With a reverse mortgage, you will not outlive the equity so you can stay in the home until you pass away or decide to move out.

A reverse mortgage is not a good idea for you if….
• You plan on moving out of your home soon.
• You want to pass your home down to your children or some other family member after you pass away. The home reverts to the mortgage holder who sells it upon death to pay the outstanding balance. There may be little, if any, money left over to pass down to the heirs.

These are just a few of the considerations you should make when thinking about entering into a reverse mortgage. Of course, every situation is different so it is best to consult with family, friends and financial advisors before making your final decision. Just remember to do your research and take your time as this will be a very important decision that affects you and your family long after you pass away.