Pros

• The homeowner can stay in the home permanently
• It pays off existing mortgages on the home
• Simple to qualify
• No monthly payments are due as long as you live in the home
• The homeowner can receive payments on flexible terms
• A reverse mortgage can not get “upside down” so the heirs will never owe more than the home is worth
• Heirs inherit the home and keep the remaining equity after the balance is paid off
• Proceeds are not taxable
• The interest rate can be lower than traditional mortgages and home equity loans

Cons

• The fees are the same as a traditional FHA mortgage but may be higher than a conventional mortgage because of insurance costs
• Medicaid and other need-based government assistance can be affected if too much funds are withdrawn and not spent within a months timeframe
• The program is not well understood by most