What are the pros and cons of a reverse mortgage? How should I evaluate whether it’s right for me?
Pros: Never have to personally pay the money back until you leave your home or die. Adds a source of additional income. You can live off your home equity.
Cons: There's a high fee at the beginning. Lenders only loan up to 60% of the value. You have to be "counseled". Home depreciation could lead to heirs getting little or nothing out of your home, or there could be little or nothing for you to fund assisted living or nursing home care if you've used up the allowable funds. If you have a current mortgage or home equity line of credit you might have too much debt and not be eligible.
How to find out if its right for you? Pay for counseling. Find approved agencies via AARP or hud.gov.
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