Pros And Cons Of Reverse Mortgages
A reverse mortgage is a kind of loan that the elderly borrowers access their equity without selling their home. The loan is repaid from the proceeds that are gotten when the owner of the home passes away.
Some of the advantages of reverse mortgages are -
• Guarantees tax free income for the rest of your life
• It is you who decides how you want to receive your money. Whether in a lump sum, monthly payments, line of credit or all these ways combined.
• You can repay the repay the loan without selling you home
Some cons of this loan are -
• It is limited to borrowers of 62 years and above
• Reverse mortgage can be costly because of costly fees, interest rates, mortgage insurance etc.
• It reduces the home equity amount you leave to your children
• The loan has to be repaid when you die, sell you home or stop using it as a primary residence.
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