Reverse Mortgage

Things to Be Wary About With Reverse Mortgages

Elderly man in a suit holding money at a desk with a laptop and a teacup

After acquiring your reverse mortgage payout, the freedom is yours to do whatever you want with it. Going on a dream vacation, remodeling your home, or paying off your loans are just a few options you have. Before spending your monthly check, it is important to analyze and budget because falling into debt is a possibility with a reverse mortgage.


Reverse mortgages replace a normal income, so they are typically relied on for living expenses rather than “fun money”. The recipient of the loan takes a monthly allowance out of their home’s equity while interest accrues on the reverse mortgage. The reverse mortgage payment is not due until the house is sold or the owner passes away. This means it is important to budget for selling the house, property taxes, and interest rates. If you do not budget, your house may not be worth as much as it could have been and you will be obligated to pay off your loan without being able to rely on your home’s value.

Staying In Your Home

After obtaining a reverse mortgage payout, one of the best options is to stay in that home for the rest of your life so you do not have to worry about your reverse mortgage being due. However, if your home has increased in value, you may get more money back than what you owe on the house. Boise has a fantastic housing market so now may be a good time to look into selling your home if you have the right circumstances. Weighing your opportunity cost of staying or selling your home should be carefully considered based on your reverse mortgage and the value of your home.

Debt Stress

Whichever type of reverse mortgage you are looking into, you should understand what the total costs, interest rates, and repayment looks like. For instance, getting a jumbo reverse mortgage instead of a home equity conversion mortgage can be detrimental if your home’s value is too low, you do not want to remodel, or don’t want to invest in another property. This can lead to immense debt stress and even foreclosure if you are not careful with budgeting and understanding the loan requirements. Although the money received will not affect social security or medicare, you still have to pay property taxes and homeowners insurance.

Getting a reverse mortgage is a great investment if you are careful with your money and plan to stay in your home forever. If this is a right fit for you, reverse mortgages will give you the freedom to do whatever you want with your money, but keep the potential consequences in mind. Idaho Reverse Mortgages offers great rates for home equity conversion mortgages and jumbo reverse mortgages, get your free quote today!

Leave a Reply

Call Now Button(208) 863-6610