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Pros and Cons

Reverse Mortgage Pros and Cons


ros and Cons of a Reverse Mortgage. Many people are are not properly informed on how a reverse mortgage can benefit their lives. The Pros and Cons of a reverse mortgage are itemized below. The lists clarify several myths as well.


  • Stay in your home. You do not have to move out of your home or relinquish your title once you have finalized on your reverse mortgage. You keep your home.
  • The money is yours to do with as you please.
  • Your credit score and current income are not considered when applying for a reverse mortgage. The amount of your reverse mortgage loan is determined by the current interest rate, value of your home and your age, which you must be at least 62 years of age or older.
  • You will have no payments while you are in your home. The principle guideline for the reverse mortgage program is that you remain in your current home. As long as you stay in your current home, you do not have to make any payments.
  • Your reverse mortgage is not taxable. You do not have to file any tax forms at the end of the year with a reverse mortgage.


  • The fees of a reverse mortgage may be higher than a conventional mortgage. The cost of the FHA mortgage insurance and origination fees generate the higher costs for reverse mortgages.
  • There is a cap on the amount of loan proceeds you can receive.
  • The loan balance gets larger over time and the value of the estate/inheritance may decrease over time.