For many older USA citizens, the opportunity to cash in on the equity that is in their home is a windfall, but they must beware the reverse mortgage pitfalls. And, yes, they do exist. 

Although the values of this kind of mortgage are extolled in many types of media, old age pensioners must be conscious of all the facts about them. While they can experience a cash benefit from a reverse mortgage, they can also spend a great deal of cash getting one. Additionally, some folk may feel uncomfortable with the approaching sale of their home looming over them each time they become ill or need to go into the surgery for any reason. 

The idea behind a reverse mortgage is a sound one. After paying into a traditional mortgage over a period of years, people may enter their golden years only to find they are living in an equity-rich home yet not have enough extra funds to enjoy their planned retirement. A reverse mortgage allows them to draw off a part of that equity as a monthly stipend or take a lump sum payout. They will continue to live in and keep full possession of their home until such time they die or must leave the home to enter assisted living. At no time do they repay any of the monies received from the equity. When the home is no longer used as the first residence of the old age pensioner, the lender takes control and sells the home. 

When obtaining a reverse mortgage, pitfalls can be steep in the way of charges. There are many fees that are applied, and can easily amount to giant amounts of money, depending on the value of the home. Should the home be sold outright by the homeowner, the charges the lender could have garnered would remain in the pockets of the homeowner; supplying them with even more equity than the reverse mortgage proceeds would have given.  This amount could be in the thousands of greenbacks, which could supply rental payments on an apartment or help to pay for an RV in which to go. 

There have also been reports of individuals who, after taking a reverse mortgage, experience a health problem that requires a hospital stay. These seniors have told of appraisers arriving at their home for the point of obtaining info for a home sale; forecasting the death or incapacity of the homeowner. This kind of pain really affects the wellbeing and mental state of the homeowner, plainly. 

While many of us can gain advantage from a reverse mortgage, pitfalls do exist that will scale back the benefit for others. Careful consideration of alternative methods of obtaining money should be taken before agreeing to this kind of mortgage.