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Reverse Mortgage Pros and Cons
Quick and Easy Tips for the Advantages and Disadvantages of the Reverse Mortgage. Reverse mortgage pros and cons are going to change from person to person, but the main pros and cons of a reverse mortgage apply to most people.
What are the reverse mortgages pros and cons?
Before you begin to learn some reverse mortgage pro and cons, you’ll want to understand more about it. For instance, the pros, cons. These advantages and disadvantages regarding the reverse mortgage will help you understand if it’s the right type of mortgage for you and your family.
It’s not that difficult actually. A home mortgage, sometimes called a “rising debt or falling equity” deal is what you have when you take a loan out using your home or property as the security.
Pros and Cons of Reverse Mortgages -
The Bank Credit Line VS Loan
With a home loan you must have a regular source of income in order for the bank to approve the loan. The bank provides this loan on the basis of your assets and income relative to the home you’re buying.
With a reverse mortgage home loan you are asking the bank to loan you money based on the equity in your home. People will use the reverse mortgage loan for a variety of reasons. Vacation, home repairs, collage, pay off credit card debts, etc… You can use the proceeds from a reverse mortgage for any reason.
With the reverse mortgage loan you can receive the money in the form of a fixed monthly payment for the entire life of the loan, you can receive it in the form of a line of credit or you can receive in as a lump sum.
A combination of the three options is also available. Some people even select to have both the line of credit and a fixed monthly payment.
Reverse Mortgage Pros – Advantages
One of the advantages of the reverse mortgage loan is the conversion of your home equity into a nice non-taxable income without having to sell your home.
Another pro is not having to ever pay it back as long as you remain in the home. Even if your equity in your home drops, you are not required to pay back the loan until you die or leave the home.
Reverse Mortgage Cons – Disadvantages
Interest rates, service fees, interest rate changes, the value of your home dropping dramatically and capitol gains paid out of the sell of your home should you move out.
Visit the pages in the navigation menu above to learn more details about a reverse mortgage loan.
Reverse Mortgages Pros and Cons
Before you make any decisions on what to do with the equity in your home, you should always seek to speak with a reverse mortgage lender. Feel free to browse our reverse mortgage articles for more information. However, we always like to remind our visitors that this site does not contain recommendations or any content to be considered in any way as advice or a recommendation as each persons financial situation is unique.
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