The decision to take out a reverse mortgage opens up a wide range of topics to consider. It is an important decision and should be thought out carefully. A good practice is to use a basic decision making tool which is to create positive an negative lists. Brainstorm all of the outcomes, both positive and negative, so you can weigh the pros and cons according to what is important to you.
Money Now and No Payments
Pay off existing mortgage and debt – no more payments!
Receive tax free cash in a monthly payment, line of credit or lump sum.
Have ‘peace of mind’ sleep at night, stop worrying about money,
have money to give gifts to family members & favorite charities,
travel and simply enjoy life more….
the good things that can happen are priceless!
Reduced Equity Later
The result of borrowing money now and not making payments until later
is the loan balance increases as a result of the interest and mortgage
insurance adding to that balance. The results are, less equity than if
you made monthly mortgage payments or didn't borrow the money in the first place.
Ask yourself what impact reduced equity has on you if you wanted to
sell your home later or the importance of preserving equity for your heirs.
The reverse mortgage counseling session should aid in your learning also.
It is important to explore all factors and truly understand what is
important to you in making the decision to get or not get a reverse mortgage.