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.