Reverse Mortgage Pros and Cons

Q: Can you give me the pros and cons of a reverse mortgage? I am 62 years old and wondering if this is good to do. — Marlene

A: A reverse mortgage is a loan where your home equity is converted into cash that you receive either as a lump sum, a monthly payment or line of credit.

The loan doesn’t need to be repaid if you continue to live in the home. But if you move, the debt must be repaid – with interest.

If you die, your heirs can elect to sell the house to repay the loan.

Reverse mortgages are most beneficial if you own your home or have a small amount left to pay on the original mortgage.

Reverse mortgages are also best for people who want to remain in their home for the long term. If you’re looking to move in two or three years, a reverse mortgage may not be right for you.

One of the biggest downsides of a reverse mortgage: fees can be high. You are required to get counseling before buying this product. Contact the Housing Counseling Clearinghouse at 800-569-4287 to find a lender in your area. Or go to AARP.org for a more comprehensive look at these products.

Found here.

Sphere: Related Content

Leave a Comment