Reverse Mortgage Is It Right For Me

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Reverse Mortgage is it right for me: The Reverse Mortgage is in fact not the right mortgage loan for every senior who owns a home; there are many things to consider when you are contemplating a Reverse Mortgage.

First the amount of time you are planning to live in the home! If a person is planning on moving from the home within the next five years then you have a decision to make. It will take about five years to recover the closing cost associated with the Reverse Mortgage. Here is a list of general closing cost that you will have to pay at closing out of the proceeds.

Mortgage Insurance Premium (to protect the value of your home, the money against mortgage company failure and other issues Origination Fee (lenders Cost) State Tax Stamp
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Conversely, with a HECM, the borrower builds up debt while they live in the home.

In addition to building up debt, there can be significant up front costs when brokering a reverse mortgage. If you plan on only taking out a small portion of money or plan on living in your home for only a short time then these costs can push the effective rate on the home up considerably.

The last significant disadvantage of a reverse mortgage is that you leave your heirs with a noticeably smaller legacy. It might be something you should discuss with your heirs. When you take out this mortgage, you will have less equity in the home and likewise, the heirs will inherit a smaller portion of the home 's value. Also, the longer you live in the home, the more the interest builds up, which further lessens the equity you have in the home.

What are my current financial needs?

Everyone, no matter the age, needs to assess their budget and the best ways to effectively manage their financial needs. The easiest way to do so is by going through last month 's (or any average month 's) bills. You should include everything you regularly spend money on. Where are the bulk of your expenses? Do you need to adjust your budget?

CAN I adjust my budget? This will vary from person to person and household to household. There are many ways to cut down your expenses such as different grocery stores, paring down unused or unnecessary
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