If you are 62 or older, own your home and make it your primary residence, you are eligible to apply for a Home Equity Conversion Loan – commonly known as a reverse mortgage. The benefits of a reverse mortgage are many, but it’s important to understand the potential drawbacks before you make that kind of financial commitment.

Your CPA in Tampa at Reliance Consulting, LLC is here to help. Our professional staff will take the time to understand every detail of your financial situation in order to help you make an informed decision about whether a reverse mortgage is right for you.

The best thing about a reverse mortgage is that it can provide extra cash for a senior citizen who lives on a fixed income. The equity in your home can be a powerful financial tool, and the money it can provide may mean the difference between living comfortably and merely surviving from month to month.

As tempting as it may be to tap into that source of income using a reverse mortgage, you also should consider the potential consequences:

• Origination costs such as title insurance and lender fees typically are much higher than those for standard mortgages.
• The money received through a reverse mortgage can negatively affect your eligibility for programs like Medicaid.
• The entire cost of the loan becomes due if you choose to move out of the home.
• The assets available to your heirs can be severely diminished.
• The interest on a reverse mortgage is not tax deductible until after the loan is paid off.

Contact your CPA in Tampa at Reliance Consulting to learn more about the pros and cons of a reverse mortgage. Our free financial health checkup is a good place to start.