What Is Reverse Mortgage Of A House?what R Its Benifits And Risks?
I am entirely against the reverse mortgages because I feel there are other financial vehicles that perform better. It is not my recomendation to my clients to gamble with physical assets. You are better off selling your home, moving to a more affordable area and structure out an anuity.
A reverse mortgage in theory is merely a glorified anuity with more fees and restrictions. The only time you could really benefit is if you live too long.
Pros…. The lender can’t take your home away if I outlive the loan
You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home’s value.
Con- Unlikely you will leave anything to your heirs.
When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by reverse mortgage loan. This debt will never be passed along to the estate or heirs.
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