When our seniors look back on their lives, do they remember the good times or the nights spent trying to figure out how they would ever make the mortgage payment. Do they remember the blood that they and their compatriots shed on the field of battle or the day they finally stepped on American soil again? We hope that they remember the good. More important than this, however, is what they have to look forward to now that they are ready to retire. For many, a reverse mortgage is their last, best hope at a future they can enjoy.
Dreams and Nightmares
The reverse mortgage pros and cons read like a list of dreams and nightmares for those who are considering it. On the one hand, they can borrow the equity in their home and live a worry free retirement without having to pay the loan back until they actually die. A reverse mortgage disadvantage to this fact is that the equity in their home will be depleted over the life of the loan by interest whether they borrow the full amount of not. If you are going to get a reverse mortgage, get it all.
Wishful Thinking
The reverse mortgage disadvantage that many do not like is the high up front fees that must be paid. However, if someone said they would give you a couple of hundred thousand dollars for ten thousand, you would jump at the chance. The reverse mortgages pros and cons will not be explained this way, but it is a good way to look at it. In fact, when compared to a retirement filled with wishful thinking, it is the only way to look at the reverse mortgage disadvantages.
Mortgage Insurance or Bust
Finally, if the reverse mortgage company loans you up to $625,000 and has to wait for you to pass away to collect, you can bet they are not rooting for you. The fact is, one of the reverse mortgages pros and cons that works both ways is that you might live to be 120 years old. It is not very likely, but it is possible. That is where one of the biggest reverse mortgage disadvantages comes into play. In order to borrow the equity in your home and never pay it back until you either die or move out, you will be required to carry mortgage insurance. This could be up to a couple of hundred dollars per month, depending on how much you carry against the equity. You can take the loan in monthly installments so that you can pay the mortgage insurance out of the money you receive from the home equity.
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- The Reverse Mortgage Pros and Cons Are Like Dreams and Nightmares
