Requirements

• In addition to the age requirements, the property must be owner occupied and you must live in your home for some time every 12 months. You will satisfy this requirement if you live in the house one day out of every 12 months. This provision is to ensure that if you are the only party remaining on your loan you are not permanently living in a nursing home, or otherwise unable to occupy your home. Other conditions are that you are not be delinquent on any federal debt and that you must maintain the property. You must keep your property taxes and hazard insurance current, as well. The property can be a one- to four-unit home as long as one of the units is owner occupied. FHA requires that you attend a training seminar to ensure that you completely understand reverse mortgages.
  
  

Advantages

• The primary advantage is that you never have to pay the loan back, as long as you adhere to the loan conditions. You can also get a lump sum to pay off any of your other creditors and you can receive a monthly check to supplement your other retirement income. The approval process is very easy. There is no income requirement since you never have to repay the loan and your credit is not relevant.
  
  

Disadvantages

• You will not be able to sell your home if you decide to move. This can be a problem if you need to move into an assisted living facility or you need to live away from your home for more than a year for any reason. In addition, you will be unable to will your home to your heirs.
  
  

Conclusion

• Reverse mortgages can change your life, if you are retired and struggling to pay your bills on time. You will no longer have to make a mortgage payment and you will have additional income every month. You can get a lump sum amount to pay off all of your creditors and you will have money to spend on your grandchildren. You should not apply for a reverse mortgage without fully understanding the ramifications.