Should one sell his house or go in for reverse mortgage is a difficult choice. With these types of options, there is bound to be something good and something bad. One of the biggest advantages of reverse mortgage is there will be no re-payments as long as you dwell in your home and you can also live in your home as long as you wish. This is a huge benefit for seniors looking for a loan. The amount you owe can never exceed the housing worth.

With reverse mortgage, you have the option to choose to get the money in a lump sum or monthly installments or line of credit or even a mix of all three. The loan also has the benefit of tax-free proceeds and as such you stand to benefit from the entire proceeds.

Reverse mortgage, of course, is not just a bed of roses. There are certain inherent differences that people do not realize about reverse mortgages and conventional loans. One big demerit is the cost of a reverse mortgage - which can prove expensive. Again, there are frauds and scams that you need to be aware of so that you do not lose your money. There may be several reputed and reliable firms - but there are also fraudulent ones that lure people in and charge huge amounts. Senior citizens invariably become targets because they are most vulnerable. The problem is that many seniors are not aware of the disadvantages of a reverse mortgage and find out after it is too late. They realize that instead of getting more money they are losing money.

However, one of the main reasons senior citizens favor reverse mortgages is because they do not want to move away from their homes. The majority of these people have been in the same houses for decades and sentimentally disinclined to vacate the house. You will have to calculate how much it will cost you to live in the same home and how much it would cost you to live in a smaller home or even in an assisted living home. At the same time, decide how much money you could get if you sell your home. This should be a conservative amount that falls in with the averages in your real estate market. Comparing the costs will give you a clear picture as to what the more affordable option is.

Also, you need to determine how much equity you have in your home. Do you have enough equity that you would qualify for a sufficiently large reverse mortgage loan? The answer to this question will primarily let you know whether you should sell your home or go in for a reverse mortgage. Remember there are a lot of benefits opting for a reverse mortgage if you have built equity in your home and are at least 62 years of age. You will have cash in your hand that might include a lump sum payment, monthly payments for life or perhaps a line of credit or a mixture of several. In addition, you will not have any monthly payment to make and will not be required to pay off your loan until you decide to sell your house or no longer wish to live in your home, or die.

In the final analysis, there is no definite answer as to whether or not you should apply for a reverse mortgage or sell your home. It really is a personal decision that has many variables that include how much your home is worth, your age, your income, and many such factors.