Long-Term Care: talking, deciding, taking action Home

View Advantages and Disadvantages of Reverse Mortgages PDF download to help your decision to apply or not for a loan.

Reverse Mortgage Loan Comparison Worksheet PDF download can help you shop for a loan.

For more information, read Reverse Mortgages: Is this answer to solve your financial challenges? PDF download

Pros and Cons

Before considering a reverse mortgage, ask yourself these questions:

  1. How long do you want to live in your home? If you pay back most reverse mortgages a few years after closing, you will find this type of loan expensive because of the high start-up costs.
  2. How important is it for you to leave inheritance such as your home for your family? Remember the loan balance keeps going up as the years go by due to the interest charges being added on. There may not be much or any equity in the home left for heirs.
  3. Would it be better to sell my current home and move to a less expensive living arrangement or home? With a reverse mortgage, you will not be able to pull out as much money as you would by selling your home.
  4. How much would you make if you sold your home?
  5. What would it cost to buy and maintain a new home or even rent one?
  6. How much money would you have left after buying a new home?
  7. How long would this left over money, from the purchase of a new home, last you?

If you do decide to apply for a reverse mortgage, be sure to shop around and compare loans. Loans from different financial institutions may differ in terms of fees and interest rates. The Reverse Mortgage Loan Comparison WorksheetPDF downloadcan help you.

By asking these questions and researching your alternatives, you will have a better sense of what you want to do. It’s recommended to approach the reverse mortgage idea cautiously and with a lot of research. Also, it is good to talk with family and friends before making a decision. And, as with all contracts, you may want to ask a lawyer for assistance in understanding the loan agreement before you sign it.