Reverse Mortgage Pros & Cons
Reverse Mortgage Pros
- No Income Qualifications - There has been rumors of possible changes to factor in income that may come as soon as late 2012 or early 2013
- No Credit Qualifications - There has been rumors of possible changes to factor in credit that may come as soon as late 2012 or early 2013. Bad credit does not matter!
- Medicare Not Affected - Any money received will not affect eligiblity for medicare
- Social Security Not Affected - Money from reverse mortgages will not affect social security eligiblity
- Retain Ownership - The borrower retains ownership of the home until the home is sold or the borrower passes on
- Not Taxable - Loan advances are generally not taxable
Reverse Mortgage Cons
- Age Requirement - Borrowers must be at least 62 years old
- Higher Fees - Although you do not have out of pocket costs, the fees are added to the balance. The fees come in the form of mortgage insurance and orignation cost
- Medicaid - Medicaid eligiblity is determined in part by total assets. As a result, those that take out the lump sum will likely have their Medicaid eligiblity affected.
- Counseling Session Required - Borrowers must attend a reverse mortgage counseling session prior to being approved