Reverse Mortgage Disadvantages to Consider
After you have learned all about reverse mortgages, it is important to consider whether or not one is right for you. Reverse mortgage disadvantages can outweigh the benefits for some borrows, but this is not always the case.
Contact us at Citizens Reverse Mortgage to learn more about reverse mortgage requirements in Florida, Pennsylvania, or California and whether or not the reverse mortgage disadvantages are greater than the benefits in your unique case.
Reverse Mortgage Disadvantages: Fees and Insurance
A reverse mortgage comes with a variety of associated fees. These costs are similar to your original mortgage and can add up to several thousand dollars when all combined. These can include origination fees, insurance fees, and closing costs similar to a conventional mortgage. However, if you plan your finances correctly, you can use the money from your reverse mortgage to help compensate for these costs making it easy to account for this potential reverse mortgage disadvantage.
Impacts to Medicaid & Food Stamps
Because certain federal programs, such as Medicaid and food stamps, look at all sources of income, the payments from your reverse mortgage are included. Typically, the sum of the loan will be enough to disqualify you from these services if you are already receiving them. So this is something important to consider. It is worth noting, however, that Medicare and Social Security are not affected by payments from a reverse mortgage and you may even be able to supplement those benefits with the help of your loan.
Reverse Mortgage Disadvantages: Eligibility Rules
In order to make reverse mortgages valuable and beneficial to both borrowers and banks, there are strict rules in place about who can borrow and how much. These rules are designed in part to protect against you having to pay more than you borrow or to prevent your loan from coming due before you want it to. For example, lenders are required to verify that you can continue to pay insurance and property taxes throughout the life of your loan. This may exclude some people, but in the end, it protects homeowners and their families from this potential reverse mortgage disadvantage.
Contact Us to Learn More About Reverse Mortgage Disadvantages
Reverse mortgage disadvantages can be difficult to understand on your own, and you certainly should not proceed with any financial agreement without fully understanding it. Contact Citizens Lending Group in California, Pennsylvania, or Florida to learn more about reverse mortgage requirements and other important factors affecting reverse mortgage loans.