Reverse mortgage pitfalls occur nearly everyday. Are you considering such a loan and if you are have you thought about the negative aspects of such a loan?

Unless you came into this world with out your eyes or ears you have most likely seen all the ads on TV, the radio and in newsprint as well.

This type of loan probably fits well for many people as I'm certain that is does but there are many caveats that you need to pay very close attention to and be aware of when considering a reverse mortgage loan.

There are many loan programs, over a dozen at the time of this writing, that are designed around the reverse mortgage concept.

Your first action should be to only do business with a lender who will offer you multiple choices for this type of loan package.

Be very wary of lenders who will only offer you two or three choices as most likely these are in house packages that are self centered with your lender and may not offer you the best terms that you will find with lenders offering you a bigger selection of loan packages.

Reverse mortgage pitfalls can be completely avoided by arming yourself will all the facts before you go shopping for one of these loans.

Most often these types of loans are structured around a few basic requirements starting with your age. As an example, HUD requires you to be 62 while more conventional lenders will be willing to loan to younger people.

The major pitfall here is that the younger your age when the loan is made, the less interest you will be offered on that loan. This can have major consequences for you down the road.

Inflation! This ugly fact will never go away. As the cost of living increases year after year will your loan payment increase as well?

You should stipulate in your contract that cost of living be adjusted accordingly or you could find yourself in real trouble 10 years down the road.

Another reverse mortgage pitfall factor that you must pay close attention to is your yearly taxes. These must be payed by you, the home owner. Have you figured those costs into your income levels 10 years down the road from now?

Property upkeep. Yet another expense factor you must not ignore! Expenses such as your plumbing costs, HVAC, roofing, flooring and a tons of other things that pop up from time to time. You must include those costs as well.

Your home owners insurance payments. Your lender will require that you keep up to date insurance on your property as they need to protect their investment. Have you included those costs into your future income forecast?

Last but not even close to least is your utility costs. They will continue to rise as previously mentioned in the inflation factor. How much to you think you will be paying on your electric bill a decade from now?

The bottom line? These are just a few of the things you need to consider and talk over with your lender. There are more and you will find these online if you know where to look.

Add up all your expenses you will pay over the next decade and make sure these factors are included in any type of loan contract you agree to. The buying power you have today should be the same buying power you have 10 or 15 years down the road.

Reverse mortgage pitfalls? Yes but certainly not always. Depending on how you structure you loan it could work out beautifully for you in the end. It all depends on how much knowledge you are bringing to the table and remember that knowledge equals power and only you decide how much power you will bring to that table!