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# What's Good about Reverse Mortgages?

- First of all, there's no need to relocate. You can continue to live in your own home, which means that you don't have to learn the streets, routes, and shortcuts of a new area. You also won't have to make new friends, find new shopping and dining establishments, or break in new neighbors. You can also continue to use the same doctors, hospitals, and other healthcare providers that you're already accustomed to frequenting.
- You can receive spendable cash to pay your bills, invest, or simply improve your lifestyle. You can buy new clothes, cars, or other things that you desire; you can also buy gifts for your children or grandchildren. You can even take an around-the-world cruise; the money is yours to use in virtually any way you'd like. You can also diversify your portfolio; for instance, if most of your wealth is in your house, taking some of it and putting it into stocks or other investments might be a wise financial move.
- If you're a senior, it's very easy to qualify for a reverse mortgage. There are no income levels, no minimum credit score or assets, and no required medical tests. However, you can't have a large amount of debt (other than a reasonable mortgage on your home, which you'll have to pay off with the loan's proceeds).
- You can decide in what form to receive your money. You can choose a lump sum to pay off debts or make all-cash purchases. Or you can opt for a monthly income that will continue for as long as you live in the house. A line of credit is also available so that interest will accrue only on money you actually withdraw. You can even combine these choices; for instance, you could take part of the loan's proceeds in a lump sum and have access to the rest by way of a line of credit.
- You don't have to make any monthly payments until the home is no longer your principal residence (by selling it or no longer living there for more than twelve consecutive months).
- The money that you receive from a reverse mortgage is tax-free.
- You can get free or low-cost advice from a U.S. Housing and Urban Development (HUD)-approved counselor; as a matter of fact, it's a requirement to qualify for the loan. The government wants you to have the necessary information to ensure that a reverse mortgage is right for you. There are other safeguards in place as well, such as interest rates that have lifetime limits, a three business day right-of-rescission if you decide the program isn't for you, full advance disclosure of the loan's closing costs, and no prepayment penalty.
- The Home Equity Conversion Mortgage, or HECM (the most popular type of reverse mortgage), features a credit line that automatically increases for unused amounts.
- Neither you nor your heirs ever have to sell the house. Other assets may be used to pay off the mortgage.
- A reverse mortgage is a "non-recourse" loan. In other words, even if the value of your home ends up being less than the amount that you borrowed, neither you nor your heirs will owe the bank any money. You'll never owe more than the value of the house.

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