If you are an older home owner you may be starting to consider the the possibility of getting a reverse mortgage on your home to get access to some extra cash. Getting cash now when you need it for things like retirement funding and money for helatcare purposes can be a good idea to provide instant relief, but can have other consequences that may outwiegh the immediate benefit of a reverse mortgage. We will explain certain situations you might be in as a homeowner that might not be ideal for taking out a reverse mortgage on your home.
You Can’t Afford the Payments
Taking out a reverse mortgage may provide some immediate cash, but it can become quite expensive for homeowners in the long run. The proceeds you receive for a reverse mortgage may not be enough to cover maintenance costs for your home, property taxes, and premium’s on homeowner’s insurance. If you fail to make payments in any of these fields you risk losing your property if you can not pay off the reverse mortgage loan when lender’s call for it.
You Have Heirs
If you have the intention of leaving your home to your heirs after you die then getting a reverse mortgage might complicate being able to do so. If your heir does not have the money necessary to pay the remainder of your reverse mortgage loan in the event that you pass, then your home may be lost and sold off to some other party. There are options available such as your heir taking on a traditional forward mortgage loan to maintain ownership of the home, but if they fail to qualify for such a loan then the home could still be sold off to strangers by your lender in order to satisfy the remaining debt from your loan.
You Live With Someone Else
If you share your home with other people like friends, roommates, or relatives whose names are not included in the paperwork for your mortgage loan, they may find themselves without a place to live in the event that you die. Even if you do not die, but rather move out for a longer period of time, then the people currently living in the home could still be kicked out, as most reverse mortgage loans require the borrower to live in the home that the reverse mortgage loan is taken out on. You could resolve this kind of problem by simply including the other residents in your property on the reverse mortgage loan’s paperwork.