The Pros of a Reverse Mortgage by Barry Waxler

Reverse mortgages, around since the 1960's, have been making a comeback in recent years - here are the pros of a reverse mortgage and what having one can do for you financially.

Many people extoll the dangers of reverse mortgages, and the problems that recipients of these mortgages can have. The pros of a reverse mortgage, however, may outweigh the cons in some circumstances. Reverse mortgages are available to homeowners that are age 62 or older, and can often be a source of income that is easy to access and available to supplement Social Security payments or other pension plans. There are no credit checks or income requirements for reverse mortgages, a plus for many older individuals.

Since a reverse mortgage pays ready-to-access money to homeowners based on their home's equity (value), the pros of a reverse mortgage seem simple. You are able to get the money "out" of your home that you have already paid into it via a traditional mortgage. Since you have paid for the home, it seems logical to be able to use this money for day to day living. Unlike a regular loan, there are no payments that need to be made back to the bank or lending company.

Reverse mortgages are only useful for older individuals, and grim as it may sound, most who take out these mortgages are expected to die before using up the equity in their home. This means that since there will still be equity in the home before the "term" is up, people who use reverse mortgages cannot be evicted from their home - the way someone who doesn't pay for a traditional mortgage can be. If the equity is used up before a mortgage holder moves or passes away, no more payments will be made. Also, no payments will need to be made in order to retain the home until the end of the reverse mortgage - which will be left to relatives.

This available money is the biggest of the pros of a reverse mortgage, because fewer and fewer people are truly ready and able to live on their meager retirement benefits. Having a reverse mortgage can mean more spending money so that retirees can spend their time having some fun - traveling, eating out, or whatever they wish to do.

The pros of a reverse mortgage are fairly obvious, but the cons must also be explored in order to make sure that this type of mortgage is right for you, and your family in the future. Only then should this mortgage be considered.

About the Author
Barry Waxler provides alternatives to a reverse mortgage that help you avoid waisting the equity in your home. Visit him at UFCAmerica.com.