Reverse mortgage is a relatively new concept which has emerged in the past few years, reverse mortgage is meant for senior citizens, reverse mortgage is opposite of normal mortgage, that is in reverse mortgage it is the bank which give regular payment to the owner of property which he or she already own provided there is no existing loan outstanding against it. Let’s look at some of the advantages and disadvantages of reverse mortgage –
Advantages of Reverse Mortgage
1. Under Reverse Mortgage, the person taking it can retain live in the home which is mortgaged and also retain the home ownership.
2. Money installments received under reverse mortgage will be tax-free which leads to saving in
3. There is no restriction on the way in which the installment amount is spent by the person who has taken reverse mortgage.
Disadvantages of Reverse Mortgage
1. If a person wants to transfer the property to his or her heir then it will not be possible if there is reverse mortgage on the property, as property will need to be sold in order to pay off the reverse mortgage.
2. Reverse mortgage is somewhat complicated process and therefore most people tend to stay away from it.
3. Reverse mortgage is not a remedy for all the financial trouble that is it can only support the life of person taking it, however if a person is into deep financial trouble then it cannot solve it.
Hence as one can see from the above reverse mortgage has both advantage as well as disadvantage and therefore person should look carefully into it and then take the decision about reverse mortgage.