For many people, a Reverse Home Mortgage is a good way to increase their income in retirement - positively affecting their quality of life. One can understand various advantages of Reverse mortgage by going through the following points :
No Risk of Default :
Unlike a home equity loan, with a Reverse Home Mortgage your home can not be taken from you for reasons of non-payment. If you default on a home equity loan, you could lose your home.The Reverse Mortgage Lenders have no claim on your income or other assets.
No Downside :
With a Reverse Mortgage you will ever owe more than your home's value at the time the loan is repaid, even if the Reverse Mortgage lenders have paid you more money than the value of the home. This is a particularly interesting advantage if you secure a Reverse Mortgage and then home price declines.
Tax Free :
The money from a Reverse Mortgage is typically tax free, since it’s a loan when the homeowner receives the funds, as either additional fixed income or a lump sum.
No Restrictions :
How you use the funds from a Reverse Mortgage is not restricted - go traveling, get a hearing aid, purchase long term care insurance, pay for your children’s college education - anything goes.
Flexible Payment Options :
You can receive the Reverse Mortgage loan money in the form of a lump sum, annuity, credit line or some combination of the above.
Easy Pre-Qualifications :
There are no income qualifications to get a Reverse Mortgage.
Home Ownership :
With a Reverse Mortgage, you retain home ownership and the ability to live in your home.
Guaranteed Place to Live :
You can live in your home for as long as you want when you secure a Reverse Mortgage.