If you have a home that's paid off - or almost paid off - a reverse mortgage can help you live better by providing a steady stream of dependable income.
This type of mortgage is called a reverse mortgage because instead of you paying the lender a certain amount per month for a certain number of years, the lender pays you.
One of the mine finance adviser friend want to wish about to share Reverse Mortgages Pros and Cons here which described below.
(1) There is no monthly repayment of principal and interest for as long as at least one borrower lives in the home; however, property taxes and homeowners' insurance must still be paid, does not affect Social Security and Medicare benefits.
(2) The adjustable rate is better suited for most borrowers with five cash-advance options to select from, which provides a great deal of flexibility in structuring how they receive the funds to meet individual needs
(3) The line of credit option provides a growth rate which can provide access to more home equity.
Reverse Mortgages Cons:-
(1) The fixed-rate option forces a borrower to take a lump sum at closing, which can lead to a number of problems such as risk of depleting funds, paying more in taxes, jeopardizing benefits, and accelerating equity depletion.
(2) Can lose your home in foreclosure. In fact, there are 16 ways that a borrower can be foreclosed on, and there are currently 30,000 seniors in default and at risk of losing their home.
(3) Equity in a home, intended to be left to heirs, may quickly be depleted by accruing interest and mortgage insurance premiums leaving heirs with nothing. Also, family members may find that they have no other choice but to sell the home that holds family memories.
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