What Are Some Pros and Cons of Reverse Mortgage
4 minute read
October 18, 2019


A reverse mortgage is an excellent component to your retirement planning because it provides funds for now and for the future. But it isn’t exactly for everyone. We at Aceltis Group believe that you must know about all the Pros and Cons of Reverse Mortgage. 

We want you to understand the different advantages and disadvantages of a reverse loan. By reading this post, you’ll be able to determine whether a reverse mortgage is the right thing for you or not. 

Here are some pros and cons of Reverse loans.

Pros of a Reverse Mortgage

  • With a reverse loan, you will have the ability to continue living in your home and still retain its title. But as with any other mortgage, you have to meet all the loan obligations while keeping current property insurance, maintenance, taxes, and any association fees.
  • A reverse mortgage is an excellent choice for homeowners and homebuyers who are 62 and older because it is an option that makes it easier and comfortable for you to live in retirement.
  • You can use the funds from a mortgage loan to pay off the current mortgage on your home. 
  • A reverse loan allows you to take all the funds as a lump sum. This is your line of credit that you can tap whenever you needed. It also provides a steady stream of monthly advances under a given period or as long as you live in your home. Other payment options, in contrast, are only available under adjustable-rate mortgages.
  • As long as you live in your home and continue to meet the loan obligations to pay your insurance, taxes, and maintenance, you will not have to pay monthly mortgage payments. 

Further Benefits of Reverse Mortgage

  • The loan proceeds from a reverse mortgage are generally not considered to be taxable income.
  • It is a non-recourse loan, meaning that neither you nor your heirs are personally liable for the amount of mortgage that exceeds your home’s total value once you have completely repaid the loan.
  • If the home you live in gets better value in the future, you can always refinance your reverse mortgage to gain even more proceeds.
  • After you have repaid the reverse loan, all the remaining equity will belong to you or your heirs
  • A reverse mortgage loan generally does not affect your social security and medical benefits. But you may still have to consult with a financial expert to see if the potential financial implications of obtaining such a loan. Our experts can help you with this.
  • The reverse loan also allows you to finance any closing costs and ongoing fees such as the Mortgage Insurance Premium and Federal Housing Administration. This will make your out-of-pocket expenses minimal.

Cons of Reverse Mortgage

  • You leave fewer assets to your heirs when you use the home equity under a reverse mortgage. You will still be able to leave your assets to your heirs, but they will have to repay any remaining loan balance. Usually, in this instance, the loan is paid off by selling the property.
  • Fees can be higher compared to a traditional mortgage. Get in touch with us to get lower-cost options.
  • The loan balance usually increases over time as the interest and fee on loan accumulates.
  • It affects your Medicaid or Supplemental Security Income eligibility. You should consult a financial expert to see what affect other needs-based government programs have.
  • The loan will become due if you cannot meet loan obligations, which includes paying property insurance, taxes, and association fees. You will also have to maintain your property to avoid this.

How Can Aceltis Group Help

Now, after having read all the pros and cons of reverse mortgage you have understood what it brings. No wonder, it can be confusion for you to find the right company to help you get your loan. With literally thousands of lenders to choose from, borrowers can easily become overwhelmed.

Fortunately, at Aceland Mortgage, our mission is to set a high standard in the mortgage industry. We commit to quality customer service – we put the people we serve first. Take advantage of our expertise in the residential lending industry by applying online today. 

You will find that the skill, professionalism, and consideration. We give all of these to each of our clients. This makes getting your loan a successful endeavor.

Get in touch today and get locked in great rates. 

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