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The Pros and Cons of a Reverse Equity Mortgage


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TERMINOLOGY

Getting a reverse equity mortgage can provide you with a number of benefits during your retirement years. Here are some of the pros and cons associated with a reverse equity mortgage.

Pros

One of the biggest advantages of this type of loan is that you will be able to create a regular source of income for yourself. The lender is going to provide you with a monthly payment for an extended period. This allows retirees to supplement their incomes if they need to.

Another advantage of this type of loan is that you will never have to make any payments to the lender. Even after you have stopped receiving equity payments, you can continue to live in the property for as long as you want without making any payments.

Cons

A big disadvantage of using this program is that you will be eating up the equity in your home. This will not leave you with as much to leave to your beneficiaries if you wanted to leave them some type of inheritance.

Another disadvantage of this type of program is that you have to meet certain requirements in order to qualify. For example, you have to be at least 62 years old before you can benefit from this type of loan.