Reverse Mortgages pros and cons

'Do You Want A Reverse Mortgage?

Compiled by the Staff of

 Let's first discuss what a reverse mortgage is. A reverse mortgage, commonly known as a life mortgage, is a loan made to senior citizens. It is usually used to release capital on a large scale or in installments. At the same time, the applicant agrees that if he moves or dies, the money can be returned by taking the house. This loan is provided to senior citizens over 62 years of age.

 They receive excess equity capital in the form of cash payments. They can spend this money on other needs. It can be said that these mortgages can convert home equity into cash in several ways. From one-time payments to monthly payments or to a capital line or a combination of different methods.

 This is the age that counts on the amount of the loan. The current interest rate, the loan fee, and the cost of the loan are some other factors that affect the amount of the loan.

 There are many mortgage companies that provide this loan. Republic mortgage is one of those that provide reverse credit. It is commonly said that a reverse mortgage loan is good because it gives you access to money when you need it. But the bottom line is that if there are any advantages, then there are also disadvantages.

 These loans are not for everyone. These reverse mortgages do not have to provide complete information when raising home equity. The fees on these loans are more than a conventional mortgage due to the cost of insurance.

 The forward load is quite high. They don't tell you that the initial cost is very high. So, here are some of the pros and cons to take into account before going for a reverse mortgage.

 Following are some pros and cons of the reverse loan:


-  This loan gives the opportunity to the homeowner to live in the house permanently.

-  This loan helps in paying off the existing loan on the house.

-  It is quite easy to qualify for a reverse mortgage as the income and credits are not taken in to consideration.

-  There are no monthly installments to pay as long as the owner stays in the house.

-  Payments are received by the homeowners on some flexible terms such as monthly income, emergency, or a lump sum.

-  This mortgage is never a loss as the heir gets what the home is worth of.

-  These loans have a low-interest rate in comparison to the traditional mortgage.

-  No taxes on proceeds.

-  After the mortgage is paid the heirs can inherit the house.


  • It is supposed that these reverse mortgage loans do not give complete detail when home equity is cashed out.
  • The fees of these loans are more than conventional mortgages due to insurance costs.
  • The front-load is quite high.
  • They don't tell you that the front cost is very high.
  • Your children who have been counting on inheriting the house debt free will possibly a little upset. 

These are some of the pros and cons that should be kept in mind before going for a Reverse mortgage loan.