Advantages and Disadvantages of Reverse Mortgages

Advantages of Reverse Mortgages

Here we take a look at some advantages of reverse mortgages:

1. You will receive regular income during retirement

2. You will not have to pay taxes on the money you receive

3. It is a non-recourse loan

4. You are not required to repay the loan until you move or sell the home

Disadvantages of Reverse Mortgages

There are some potential disadvantages of reverse mortgages:

1. You must be at least 62 years old to obtain a reverse mortgage through the Federal Housing Administration (FHA)

2. There are several costs associated with obtaining a reverse mortgage, including mortgage insurance

3. Your heirs may not be able to keep the home if they cannot repay the loan

4. If you are unable to stay in the home due to long-term care, the loan becomes due

Should I Take a Reverse Mortgage?

After learning about the advantages and disadvantages of this controversial type of mortgage, you can decide whether it is suitable for your situation. You may consider taking a reverse mortgage if you are at least 62 years old and do not plan to leave your home to your children. Make sure you can afford the payments and other costs in addition to the taxes on the home. If you are still unsure, selling the home and recovering your equity in a less complicated way may be a better option.

Frequently Asked Questions (FAQs)

1. How much can you get from a reverse mortgage?

2. What are the requirements for obtaining a reverse mortgage?

3. How can you get out of a reverse mortgage?

4. When is a reverse mortgage a good idea?

Source: https://www.thebalancemoney.com/reverse-mortgage-pros-and-cons-2388750

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