Forward or Reverse?


Weigh The Pros And Cons Associated With A Reverse Mortgage

A reverse mortgage can be a valuable retirement planning tool that can greatly increase retirees income opportunities via their largest assets: their homes. A reverse mortgage allows homeowners to borrow against their home’s equity, while still maintaining ownership of the home. The best part about a reverse mortgage is that unlike conventional mortgages, there are no payments involved (though the borrower is still responsible for the payment of property taxes, insurance and regular maintenance). Instead, the lender makes payments to the borrower either through a lump sum, monthly payments, or a line of credit.

Find Out All You Can Before Going For A Reverse Mortgage

Reverse mortgages can certainly be a great option for eligible borrowers looking to improve their cash flow; however, they are not for everyone. It’s vitally important that anyone considering a Reverse Mortgage take the time to consider all of the pros and potential negatives associated with them.  The good news, in addition to our site, there are several great resources on line for folks to do the research and help them decide if a reverse is right for them.

The pros associated with a reverse mortgage:

  • You won’t have a mortgage payment to make: This is considered to be one of the main benefits associated with a reverse mortgage. Reverse mortgage borrowers do not make a monthly mortgage payment, and in fact can receive monthly payments depending on the type of payment terms they choose.
  • You’ve got multiple options for receiving payment: Reverse mortgages offer flexible options as it relates to how you can choose to set up payments. In general you’ve essentially got 6 options, which include – a line of credit, Term, Tenure, Modified Term/Line of Credit combo, Modified Tenure/Line of Credit combo, Single disbursement Lump Sum.
  • The proceeds are non-taxable: As monies are obtained via loan proceeds, there are generally no income tax liabilities to be concerned with.

The cons associated with reverse mortgage:

  • The affect on the equity of your home: The nature of a Reverse mortgage is that the loan reduces your home’s equity over time.  For those who have plans or simply desire to leave their home to their heirs, this will of course be a detriment.
  • Fees can be quite high: While in reality the fees are very similar to those of traditional forward mortgages, they are none-the-less an issue that must be considered carefully.

It’s imperative that you keep in mind the above discussion and thoroughly weigh the pros and cons of reverse mortgages before coming to any concrete decision. Financial decisions of any kind need to be thought over carefully and reverse mortgages are no different. Take care not to land yourself in an unnecessary financial muddle during the golden years of your life. Give us a call and we’d be happy to walk you, hand-in-hand through the Reverse process.

These materials are not from HUD or FHA and were not approved by HUD or a government agency.

 

About Two Bald Mortgage Guys


Ken Blanchard, one of the country’s premier business leadership authors, says in his latest book, “To keep customers today, you can’t be content to merely satisfy them; you have to give them legendary service and create ‘raving fans’ – customers who are so excited about the way you treat them that they tell stories about you.” In everything we do, this is what we envision. We see people such as yourself being so enthused with the process and service we provide that you will become a raving fan for us, telling stories to people of what you just experienced.




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8202 Louisiana NE
Suite B
Albuquerque, NM 87113
Phone:
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(505) 830-9684

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