Advantages and Disadvantages of Reverse Mortgage

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.

0 comments… add one

Leave a Comment

Related pages

gst fullformjoint venture disadvantagesdebit card disadvantagesdefine ficitiousexamples of inferior goodsdifference between complimentary and complementarytypes of elasticity of demand with exampleswhat is autocratic leadership in businessdemerits of socialismweaknesses of a command economyorder cheque and bearer chequeerror of omission in accounting examplehorizontal merger meaningaccounting concepts consistencymcdonalds monopolistic competitionclr slrauthorized vs issued sharesexample of a vertical mergerwhat is full form of micradvantages and disadvantages of globalizationcomplementary and substitute goods exampleswhat is autocratic leadership stylewhat does ebit mean in financemarginal cost in cost accountingcharacteristics of a monopolistic competitionadvantages of mergersquota tariffcompare shopping portalsautocratic coaching styledefine normal good in economicslifo benefitswhat is the difference between complimentary and complementarymeaning of accrued incomedepreciation declining balance methodtypes of factoringglobalization advantages and disadvantageswhat is the profitability ratiodifference between direct cost and indirect cost with exampledeferred revenue journal entriesdisadvantage of industrializationagro based industries definitionskimming pricing strategy examplewhat is fictitious assetcarriage inwards definitionjournal entry for provision for expensesglobalisation advantages and disadvantagesdefinition of a planned economyimport advantages and disadvantagescharacteristics oligopolydisadvantages of international marketingdisadvantages of mixed economic systemcash discount accounting treatmentkpo abbreviationfutures advantages and disadvantagesdictatorship leadership stylewhat are the disadvantages of globalizationmarket skimming and market penetrationnse pre openhow crr is calculateddurable and nondurableadvantages and disadvantages of payback perioddefinition of cost push inflationdisadvantage of fifoadvantages and disadvantages of chequesconsignee meaning in englishbank loan accounting entriescommand economy country listtrial balance meaningconsignee consignor meaningbarter system economyfeatures of autocratic leadershipsteps on how to withdraw money from atmformat of marginal costingexamples of traditional economywhat are the benefits of swot analysislifo methodprestige pricing advantages and disadvantagespaid salaries to employees journal entry