Pros and Cons of Reverse Mortgages

Pros and Cons of Reverse Mortgages

Considering a reverse mortgage? This type of loan enables owners of a certain age to borrow against their home equity without repayment until they move out or pass away.

But before you sign on the dotted line, here are some benefits and risks to consider:

➕ You can tap into your equity now, when you really need it

➕ You’ll eliminate any existing mortgage payments, so you can lower your monthly expenses

➕ Funds aren’t taxed since they are considered a loan rather than income

➖ Your heirs may need to sell the home after you pass to repay the lender

➖ Interest rates and fees are often higher than those for other types of loans

➖ Associated costs can eat away at the value of your estate

The reality is, reverse mortgages aren’t right for everyone, and downsizing can be a better choice for some homeowners. Schedule a free consultation to discuss your options.

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