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PROS vs. CONS

PROS OF REVERSE MORTGAGES

  • Better manage expenses

  • Don’t have to move

  • Pay no taxes on the income from equity

  • If the Reverse Mortgage loan balance exceeds the value, you are protected

  • Can be used as an asset preservation strategy

  • Heirs have options when you pass or leave the property

  • Can be used as a delaying strategy for social security benefits until Full Retirement Age (FRA) is reached

  • Can be used for a Reverse Mortgage purchase

CONS OF REVERSE MORTGAGES

  • You have to pay expenses associated with obtaining a Reverse Mortgage loan

  • Interest on the loan isn’t deductible until the Reverse Mortgage is paid in full

  • Potential to violate other programs having asset restrictions

  • Your home can be foreclosed on if you fail to keep up on property taxes, homeowners insurance, or HOA fees

  • Changes with your status can create challenges with some aspects of your Reverse Mortgage: getting married, moving to a senior care community, etc.

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