If you are looking for a way that you can make your retirement a bit better, you may want to consider checking into the reverse mortgage options that you have. You will find that there are a variety of companies today that will offer you the opportunities to get a senior reverse mortgage, which can really make a difference in your life. However, you'll find that although there are a variety of advantages to doing so, there are also a few disadvantages as well. Although many times you hear all about the advantages, you may not be aware of all the disadvantages to going with a reverse mortgage. So, let's take a look at some of the disadvantages as well as some of the considerations you'll need to keep in mind if you are considering this options for your needs as a senior.
Disadvantages to Be Aware Of:
First of all, there are some disadvantages that you need to be aware of. Here are just a few of those disadvantages that you will need to keep in mind.
- Disadvantage #1 - Building Up Debt - One of the main disadvantages that you'll encounter is that you'll be building up debt over time while you live in your home. Usually with a regular mortgage you work on paying off the debt on your home over 30 years, but when you go with a reverse mortgage, as long as you are living in your home, you are going to find that you are building up debt instead of paying it off.
- Disadvantage #2 - Large Costs Up Front - Not only will you find that building up debt is a disadvantage, but you'll also find that another disadvantage is that there can be some rather large costs you have to pay up front when you go with this option. These costs really go up when you are only wanting to take out part of the money or you only want to live in your home for a couple more years. So, this can be a big disadvantage to be aware of before you make up your mind.
- Disadvantage #3 - Leaving Your Heirs a Smaller Inheritance - Going with Minnesota reverse mortgages also has the disadvantage of leaving your heirs a smaller inheritance as well. Although they are probably not really interested in the money you lave behind, you may be. You'll have less equity in your home if you go with the reverse mortgage, meaning that the home will be worth less, which can affect the heirs that you leave behind.
Considerations You Need to Think About:
Now that you understand that there are a variety of disadvantages to keep in mind, there are other considerations that you'll need to think about before you decide whether or not this is going to be the best senior housing option for you and your needs. Here are a few important considerations that you need to keep in mind.
- Your Current Needs Financially - First of all, you need to consider your current needs financially. Take a close look at your budget and figure out which options are going to best help you to deal with the financial needs that you have. Take a look at the bills you have. Do you have too many expenses and are you barely getting by? Perhaps you need to adjust your budget or you need to find a way to get extra money, such as through a reverse mortgage.
- Can You Adjust Your Budget? - Ask yourself whether or not you can cut down on some of your expenditures to adjust your budget. Of course there are some things that you may need to sacrifice; however, some things you cannot live without. Before you decide to go with a reverse mortgage, it's important to figure out how long the equity that you have will be able to help you support yourself on the budget that you have.
- Will You Move to Avoid a Reverse Mortgage? - Is moving an option for you if it helps you to avoid going with a reverse mortgage? If you want to move and it will keep you from going through this option, it may be the right choice. However, it's not always the best choice. You may want to stay in your home and often you'll find that a reverse mortgage can help you to do so.
- Benefits of a Reverse Home Mortgage - Last of all, you'll want to consider all the benefits that a reverse home mortgage can provide you with. You will have the advantage of having more cash to deal with and you'll be able to pay off some debt and live a better life. However, it's important that you balance out the benefits with the cons of the option as well. Take the time to figure out if the benefits outweigh the problems, and if they do, then this may be the right choice for you.
Where can you get this type of loan? Think about using a mortgage broker. A mortgage broker that is FHA approved will be able to offer you the FHA HECM product as well as conventional products. You will want to evaluate both before you make your choice.
Looking for a reverse mortgage in Minnesota?-check out http://www.MinnesotaReverseMortgage.net John Mazzara is involved with financial services in the Twin Cities, MN. Officing out of Edina, Minnesota-John is centrally located within the 7 county MN metropolitan area. John owns three separate businesses-a licensed real estate broker associate selling Minnesota real estate since 1986-affiliated with RE/MAX Associates Plus http://www.MinneapolisStPaulHomes.com , an independent CFP-certified financial planner since 1989 with an independent Minnesota financial planning firm-Financial Planning Associates and the owner of a Minnesota mortgage broker firm-Venture Development Inc-specializing in residential, commercial and investment mortgages for purchases of single family homes, investment properties and commercial property. Venture brokers FHA, VA, Conventional loans and lines of credit. If you are looking for someone to help you in the areas of real estate sales/purchase, mortgages, or and/or financial planning and insurance you should call John for a free 1 hour consultation to see if he can meet your needs. 952-929-2577. RE/MAX Associates Plus and Venture Development are located at 7300 France Ave S, Suite 410, Edina, MN 55435
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