The Big Picture
Your Decisions Could Impact on Others
Discussing the decision to access this type of loan with family members could also be sensible so they can be aware of the consequences of such a transaction and, if desired, other alternatives may be investigated.
Knowing how your debt will grow can help you predict how much equity you will have remaining. However the nature of a Reverse Mortgage makes it very hard to predict how much you will owe.
Interest rates and property prices are difficult to estimate. Borrowers should be aware that any projections they make may not be very realistic. That being said, forecasting can demonstrate what can happen under various and extreme circumstances.
Nobody knows what will happen in the future. Should things not turn out as planned, being prepared will ensure both you and your loved ones are protected.
As interest on the loan accrues, the amount of equity you have in your home will fall. If your priority is to leave an estate for your heirs, this could be quite concerning. You could consider quarantining a portion of your equity and ensure you do not borrow too much. It may also be worthwhile to make a financial plan and stick to your budget.
If you think a Reverse Mortgage is right for you, it may be appropriate to discuss your decision with your family. It is important that your family and household understand the consequences of a Reverse Mortgage. This is especially true where dependants are concerned. You all should know what will happen to the family home on termination of your loan.