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So if there are so many great benefits to the reverse mortgage program, you may be thinking:
“what’s the catch?”

There must be some downside, right? As the old saying goes, “If it sounds too good to be true
it probably is.”

Unlike most reverse mortgage “salesmen,” I always make sure I cover the positive AND
negative aspects of a reverse mortgage whenever I meet with clients at my office (or on the
phone) in a personal reverse mortgage consultation. I want to make sure they fully understand
the program, how it works and whether it is a good fit for their personal financial needs and
goals.

There are really only two “negatives” to getting a reverse mortgage:

1. The fees are higher than a conventional loan such as a standard 30‐year fixed “Fannie
Mae” loan. But as I already explained above, the fees are NOT as wildly excessive as
some would have you believe. It’s a government‐insured loan program so you must pay
for that government insurance in addition to the typical loan closing costs. However,
the overall loan costs are just a little higher than the costs of getting a standard FHA
purchase loan, and LESS than the cost of an FHA purchase loan if you currently owe little
or no mortgage balance on your home.

2. You are spending your children’s inheritance. Yes, it’s true that you will leave less
money to your heirs if you take out a reverse mortgage loan on your home. The loan
balance will get bigger each year, using up a portion of the home’s equity. But frankly,
most of my clients are not very concerned about that. They have worked hard all of
their lives and want to enjoy the fruits of their labors while they are still around to enjoy
it. In most cases, their “kids” will be in their 60’s or older and they figure that they
should be able to take care of themselves. However, if leaving a large estate to your
children is very important to you, a reverse mortgage may not be the best way to go.

So there you have it. There are really only a couple of “negative” aspects associated with
reverse mortgages weighed against all the great benefits.

Another factor to keep in mind is that the reverse mortgage program is designed for people
who want to stay in their home long term (10 years or more). Many of my clients have been in

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