Reverse Mortgage, doing away with mortgage payments

A Reverse Mortgage is a loan for 62+ers that allows you to access the home equity you have built up over the years and have NO longer monthly mortgage payments until you sell the home, move out or pass away. The amount of money you can typically borrow is 50% of your home's value. To qualify you will need to proof you can continue to pay your homeowners insurance, property taxes and regular home maintenance. Reverse mortages do not affect public benefits such as Social Security or Medicare and do often not use credit scoring. The monthly payments you will receive are TAX FREE as it is considered a loan, it is like converting part of your home's equity into cash when other sources of income are not enough, to help pay for medical expenses, to better enjoy retirement, etc. Instead of paying $ your are receiving $. Ultimately, if the sale of the house is not enough to pay off the reverse mortgage, the bank must take a loss. Any remaining funds left after the sale of the house will go to your heirs. Money from a Reverse Mortgage can be distributed through equal monthly payments as long as the homeowner lives in the house, a lump sum at closing, line of credit so you can draft any amount at any time until the line of credit is exhausted, or any combination.                                                                       

The Federal Housing Administration wants you to fully understand the pros & cons of reverse mortgage and ALL applicants are required to get third party counseling by phone or in person before signing up.                                                                       

Disadvantages of a Reverse Mortgage are:                                                                                                                                                                                                                                                                         •Since you are using part of the equity in your house while alive, your children will receive less of an inheritance or possibly none.                                                                                                                                           •Revers Mortgages come with HIGHER closing costs, additional lender fees and HIGHER interest rates.                                                                                                                                                                                 •The loan slowly grows over time as it accrues interest.                                                                                                                                                                                                                                                   •Reverse Mortgage can impact eligibility for those who are receiving 'needs-based' state or local assistance.