 Disadvantages ofa Reverse Mortgage ?
A Reverse Mortgage is a popular, but complex, home loan just for senior homeowners. If you qualify for a Reverse Mortgage, you will not have to make monthly payments on the loan. Instead, the lender pays you. Typically, the Reverse Mortgage is repaid from your home’s equity when you sell the home, move out permanently, or die. You, or those who will inherit from you, can keep any sales proceeds from your home in excess of what you owe the lender.
To qualify for a Reverse Mortgage, you must be a homeowner who is at least 62years old. The mortgage on your home must be fully or nearly paid off. Generally, the amount you can borrow depends on the value of your home, the amount of equity you have in the home, and your age at the time of loan application.
Choosing the right Reverse Mortgage can give you greater financial independence and reassurance during your golden years. Choosing the wrong plan could lead to financial disaster.
A word of caution: If you choose a plan that requires repayment on a specific date, known as a "fixed-term" Reverse Mortgage, you must be sure that you will have the money to repay the loan on that date. Otherwise, you may have to sell your home and move in order to repay the loan.
So before you go for reverse mortgage loan it is better you take the advice of a expert counselor.
A Reverse Mortgage may be right for you if:
- you have a regular need for additional living funds.
- you live on a fixed income, and your only asset is your home equity.
- you do not plan to leave your home to your children or others who will inherit from you.
As a advantage
- Reverse Mortgage can help you maintain your financial independence and an adequate standard of living.
- A Reverse Mortgage allows you to remain in your home and retain ownership.
- The money you receive from a Reverse Mortgage is tax-free.
More on Disadvantages of a reverse mortgage
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