Reverse Mortgage Pros And Cons

Reverse Mortgage Pros and Cons

Like all significant financial decisions, there are reverse mortgage pros and cons. These pros and cons vary with your individual financial situation and your overall goals. There is no one solution that is perfect for every borrower.

Citizens Lending Group believes that California residents should be well-educated about reverse mortgage pros and cons before making any final decision. Contact us today to learn more about reverse mortgage requirements and talk to our experts about whether or not you would benefit from a reverse mortgage.

The Most Important Reverse Mortgage Pros and Cons

You are Spending Your Home Equity

As you pay down your mortgage over time, or as the value of your home increases, your equity in the home increases. One of the reverse mortgage pros and cons is that you are spending that equity when you take out a reverse mortgage.

The downside to this is that family members may have been planning to benefit from your home equity as an inheritance.

However, one significant benefit is that you will have access to money that you have essentially been paying to yourself your whole life at a critical time. Medical bills, important renovations, end of life plans: all of these things are hard to fit on a fixed income. Therefore, one of the reverse mortgage pros is that you are borrowing against the home you have paid for your whole life, but you have the benefit of financial security.


It is Common to Sell Your Home

While you are not required to, most borrowers sell their home to pay back their reverse mortgage. This is one of the more noted reverse mortgage pros and cons.

Some people are concerned that selling their home will leave them with nothing after their reverse mortgage is repaid. This may have been the case in the years of bad lenders, but the system for reverse mortgages has changed and been strengthened to protect the interests of borrowers.

Reverse mortgage eligibility requirements state that borrowers must have enough income before their reverse mortgage to pay all taxes, insurance and maintenance on their home. This is designed to help balance the reverse mortgage pros and cons. This gives both lenders and borrowers the confidence that they will not be left empty handed at the end of the reverse mortgage. Most homeowners do sell their homes before their end of life. A reverse mortgage essentially allows you to spend that money while you are still alive rather than waiting for it to be passed on to your heirs.



When considering reverse mortgage pros and cons, be sure to think about the fees associated with starting one. While the fees and costs of a reverse mortgage can be high, it is often true that the fees associated with other types of debt in critical, end of life scenarios, can be much higher. Additionally, you can often plan to use the proceeds from your reverse mortgage to cover the associated fees and expenses.


Contact Us to Learn More About Reverse Mortgage Pros and Cons

At Citizens Lending Group, we want you to make the best decision for yourself and your loved ones. Please contact us if you live in California and have questions about reverse mortgage pros and cons or reverse mortgage requirements and our reverse mortgage experts will help provide customized advice and answers for your questions.

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