Reverse Mortgages: Pros and Cons

There are many pros and cons of reverse mortgages (more pros than cons), and not all can be covered in the space of a single blog post, so I will only address the lesser-known advantages and disadvantages. A little extra research can point you to other qualities of reverse mortgages.

Pros:
* When homeowners begin thinking about ways to access equity from their home, one of the first concerns has to do with credit. You may wonder if today you have the score you will need to get a home equity line of credit, or a second mortgage. The good news is that there will not be any reason to pull your credit. It doesn't matter for a reverse mortgage.

* Another nice thing about taking a reverse mortgage is that you are not giving the lender ownership of your home. That is a common misconception.

* While you will need to show income for most types of loans, it is not a factor in qualifying for a reverse mortgage.

Cons:
When it comes to reverse mortgage pros and cons you may have to look deeper to find any negative aspects of the product.

* The first major negative is the age requirement: there is no getting around the requirement that you be 62-years-old to take the loan.

* Additionally, income from a reverse mortgage may make you ineligible for need-based programs like Medicaid.

* Fees are higher with a reverse mortgage, mainly due to insurance costs and origination fees.

* The product is not well understood, even by many mortgage professionals, so it can be hard to get good advice. Do your research beforehand.

Texas Reverse Mortgages Made Simple

Not a lot of people know much about reverse mortgages, including industry professionals. When I was in the business, there were two people, in an office of forty, who knew about reverse mortgages, and that was the only business those two mortgage consultants did.

What is a reverse mortgage? A reverse mortgage is a low-interest loan for seniors that uses the home's equity as collateral. The loan amount is a function of the home's value and the age of the youngest homeowner. The loan does not have to be repaid until the last remaining homeowner either moves out or is deceased. The estate is not liable for any amount owed if the home does not sell for enough to cover the amount borrowed. At the same time, if there is any equity leftover from the sale, it goes to the estate.

There are some factors you should keep in mind if you are considering a reverse mortgage. Even though you are no longer making mortgage payments, you are still responsible for making tax and insurance payments, which is easily forgotten. You should also know that the income you receive may inhibit your qualifying for Medicaid.

Texas Reverse Mortgages Provide Income Opportunities for Senior Home-owners

A Reverse Mortgage is an opportunity for homeowners, age 62 and older, to tap into the equity in their homes when they are in need of cash. As explained by President and CEO Norman Williams, at Senior Reverse Mortgage Services, Inc., a Reverse Mortgage is similar to a traditional mortgage in that a lender loans a sum of money to a borrower. Where it differs, however, is HOW and WHEN the money is repaid.

The Reverse Mortgage option, according to Texas Reverse Mortgage Specialists at Senior Reverse Mortgage Services, Inc., provides a unique opportunity for those who own a home to receive a percentage of their equity in their home based on the age of the youngest homeowner. They can do this without having to sell their home, move, or make monthly payments. The homeowner NEVER comes off of the deed during the term of the Reverse Mortgage. By utilizing a Reverse Mortgage, homeowners can benefit from the equity they have invested in their home and utilize the equity when they need it. Seniors that own homes with greater appraised resale value can also take out larger loans according to HUD/FHA guidelines. A non-recourse Reverse Mortgage can allow homeowners to supplement their income, funds are non-taxable, are not considered income, and funds do not affect Medicare or Social Security.

A Reverse Mortgage can be a financial benefit and source of funds to put in reserve for unexpected expenses and to supplement retirement. According to the Texas Reverse Mortgage Specialists at Senior Reverse Mortgage Services, Inc., Reverse Mortgages are an attractive option for Seniors who may no longer be drawing a regular income because this type of mortgage does not require certain income or a specific credit score. It can also be used for many reasons including paying off debts, make a large purchase, pay for medical care, buy long term care insurance, and pay college tuition, among many other pertinent reasons.

A Reverse Mortgage can even be obtained if a homeowner still owes payments on their existing mortgage or refinance loan. When the Reverse Mortgage is obtained, as the Texas Reverse Mortgage Specialists at Senior Reverse Mortgage Services, Inc. explain, the Reverse Mortgage pays off any existing mortgage. When the time comes that the homeowner moves out of the home, sells it, or their heirs sell it, the Reverse Mortgage requires an appraisal for current value and the account is settled according to the terms specified in the original Reverse Mortgage documents. According to the HUD/FHA Reverse Mortgage program, homeowners never owe more than the house is worth. Also, equity NOT obtained is also applied against the loan balance. Heirs can never inherit the loan debt, but do have an opportunity through the program to purchase the home.

According to the Texas Reverse Mortgage Specialists at Senior Reverse Mortgage Services, Inc., a Reverse Mortgage, according to HUD/FHA, is for homeowners age 62 and older. The Texas Reverse Mortgage Specialists at Senior Reverse Mortgage Services, Inc. help Senior homeowners determine the loan that best meets their financial needs.

Call 817-686-4900 for a FREE consultation with Reverse Mortgage Specialists and Loan Originators at Senior Reverse Mortgage Services, Inc.