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You’ve got to admit, there are two sides to everything. Whether or not the good outweighs the bad is the real question. Are reverse mortgages good or bad? Let’s get to the real truth starting with the “bad”.

Reverse Mortgage Cons:

1. (PMI) Mortgage Insurance – Any time you do an FHA loan, you will have mortgage insurance. This insurance is there to protect you in the unlikely event that your home is worth less than what you owe on it. The only time this realistically happens, is when we go though a recession in real estate and property values drop. The good news is that you can never be kicked out of your home or forced to move, regardless of the balance. This is all thanks to the mortgage insurance.

2. Interest that Compounds – This is good if you earn it, but most people don’t like paying it. One definition is; interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. You have probably earned it if you have had a savings or retirement account.It is the trade off on a reverse mortgage for not needing to make payments.

3. Spending Your Kids’ Inheritance – I have heard some say that it is wrong to spend the children’s inheritance. But, I have to ask, “Whose money is it”? In my opinion, if you need the money, use it. You can leave what is left over, and that should be enough. You shouldn’t blow the money, but use enough to make life comfortable.

Reverse Mortgage Pros:

1. Maintain Your Independence – What could be more embarrassing than asking your kids for financial help to cover monthly expenses? Would you like to need to move in with your kids? You can use your home’s equity to make ends meet and keep your dignity.

2. Keep your home – Have you recently thought of moving? How painful of an idea is that? A reverse mortgage will allow you the financial edge to be able to keep your home while affording the retirement you deserve.

3. Making Life Affordable – So many impoverished seniors have become so accustomed to being broke that they don’t even know that they are. Reverse mortgages allow you to access your equity and use it as a lifetime income stream. You might feel like you’ve won the lottery if you were able to get a few hundred dollars more every month.

4. No Mortgage Payments – There are no monthly payments, and you don’t have to pay back the loan as long as you maintain the home as your primary residence. This can really be helpful when times are tough.

Did you notice that the fees weren’t mentioned in the “cons” section? That is because fees are no longer a reason to not do a loan. There are new programs available that cut the fees of a reverse mortgage 50% or more. Usually the origination fee can be totally waived and you could get a large credit towards your mortgage insurance.

I have a confession to make. I am a reverse mortgage loan officer, but I truly believe that a reverse mortgage is the best tool out there to help a senior. While I agree they are not for everyone, there are a lot of folks that could benefit from one. It makes me cringe to hear someone say that a reverse mortgage is bad. They are neither bad nor good. It just depends on your need and how you use them.

It’s your turn to decide. Could this tool help you? Will it enhance your life? If you need more reverse mortgage information that is free and no obligation, visit our web site and read up.

David Prulhiere is the owner of Redwood Financial Services and he specializes in reverse mortgages. If you would like to read more about reverse mortgage pros and cons? There are more articles and blogs with additional reverse mortgage information.