"Reverse Mortgage Seattle Bellevue Eastside Tacoma Everett"

Pro's and Cons of a Reverse Mortgage

Pros of Reverse Mortgage

Homeowners stay in their home, with their name on the title
Provides monthly installments, a lump sum, line of credit, or a combination of these options
Proceeds are income tax-free*
Heirs are not personally liable for the loan when the homeowner passes away or moves out
Heirs will inherit any remaining equity in the home after the loan is repaid
There are no monthly mortgage payments(The borrower is responsible for property taxes, homeowners insurance, and property maintenance. A reverse mortgage is home-secured debt payable upon default or a maturity event.)
Funds can help extend retirement savings
Regular Social Security and Medicare benefits are not affected.**
You can pay for your closing costs and the up-front mortgage insurance premium with the loan, so out-of-pocket expense can be minimal

Cons of Reverse Mortgage

The loan balance increases over time as interest and fees accumulate.
Need-based programs such as Medicaid and Supplemental Security Income (SSI) could be affected based on specific income requirements
Fees can be higher than with a traditional mortgage. For example, there is an up-front and monthly mortgage insurance premium, which guarantees that you will receive your funds, and ensures that you or your heirs will never have to repay more than the home is worth when the loan becomes due.
The loan becomes due and must be repaid when a “maturity event” occurs, such as the last surviving borrower (or non-borrowing spouse meeting certain conditions) passes away, the home is no longer the borrower’s principal residence, or the borrower vacates the property for more than 12 months. The loan will also become due if the homeowner fails to pay their property taxes or homeowners insurance, or fails to maintain the property.

* Not Tax advice. Please consult a tax professional
** Social Security and Medicare benefits are generally not affected