Pros of a Reverse Mortgage: >>>
- No fixed due date
- No repayment required as long as the home remains the principal residence of the borrower
- Nonrecourse loans -- the amount can never exceed the selling price
- Borrowers hold title to property
- Loan proceeds not taxable
- Flexible payment options
- Loan-to-value ratios typically yield only 65% to 80% of the home's present value
- Upon death, the loan's interest and costs are due and payable, usually requiring the sale of the home. Such inheritance planning may not please heirs, who may have to pay back the loan if they wish to retain the home.
- Foreclosure is still possible, if the borrower fails to remain in the home for 12 months, or fails to pay taxes or maintain the home.
- Terms and conditions of reverse mortgages may be difficult to understand and borrowers may also be targets for aggressive sales pitches or other expensive or inappropriate services or products.
Any questions regarding Reverse Mortgages - please give us a call!