 TITLE: What Is a Reverse Mortgage? CONTENT: What Are Reverse Mortgage Drawbacks?\n------------------------------------\nWhile reverse mortgages offer some appealing advantages, there are also some significant disadvantages to a reverse mortgage that you should be aware of.\n*   Although reverse mortgages are tax-free, they aren't without cost. You'll have to pay for an appraisal of your home's value; cover substantial closing fees, including a loan origination fees, servicing fees and third-party fees; and make ongoing mortgage insurance payments. You'll also accrue interest on the amount paid out to you. Depending on how you choose to receive your loan disbursements, this may be calculated as fixed or variable interest; be sure you know which applies in your case.\n*   The loan must be repaid when you die, sell your home or move out of the home. This can cause problems if your house is part of the inheritance you hope to leave to your children. Unless your heirs can afford to pay off the loan, the lender will sell the house to do so. (Your heirs will receive any money that's left over.)\n*   If more than 12 months pass during which you aren't using the home as your primary residence, the loan will come due. This can happen if you have to stay in a rehab facility after a fall or need to move in with your children for an extended period after surgery or a medical issue. If you have a reverse mortgage, you will have to repay the loan to prevent the bank from selling your home to recoup the loan.\n*   If one spouse is under age 62, they may have to be removed from the property deed for the older owner to qualify for a reverse mortgage. Removing their name on the title can put the non-borrower spouse at risk. If the borrower dies, the non-borrower will no longer receive reverse mortgage disbursements. Worse, they could lose their home if they can't pay off the loan. END