Coming By Reliable Reverse Mortgage Information
In theory, a reverse mortgage makes for a wonderful idea. An elderly person who has his home that’s perhaps nearly paid for, but has little money to live on, can sell his title to his home to a lending company. The lending company gives him whatever his home is or two )worth on the market minus what he owes on the house; when the person passes away or when he moves out, the lending company gets the house. That’s what it says in any reverse mortgage information pamphlet you get to read. There are just just one (or two) problems. Elderly people who try to actually take advantage of a reverse mortgage find that superlow, low home prices, new lending rules and outright fraud make the whole proposition quite risky.
A reverse mortgage is open to anyone who owns a home and who is at least 62 years old. The problem is, that they can’t just accept the loan and live their lives as they will. As their reverse mortgage information kit will tell them, they will have to commit to living in that home to their end of their days. If they do move out, they will be called on to pay the loan back immediately. Those are the rules – the loan holds until they can either move out or they pass a law. The law has made it so that seniors can borrow up to $625,000; that’s quite tempting some. There are about 20,000 new applicants for reverse mortgage arrangements every month. A reverse mortgage may be a good idea in certain circumstances. It isn’t ever a good idea for those who cannot afford to make their payments. A reverse mortgage doesn’t somehow magically solve everything. If you are considering one of these yourselves, this is what you need to know.
The first thing you need to consider is, the fact that once you get your reverse mortgage loan, you become responsible for maintaining your home. You have to be able to pay your property taxes and do everything else for the home’s upkeep. And then, you can’t move to an assisted living center either. And unless you are sure that they will sell your house before the bank tries to foreclose on it, you probably won’t be able to afford moving. You probably want to read through your reverse mortgage information package to keep count of all the fees that you’ll be expected to pay. To begin with, there is the origination fees that is 2% (but no higher than $6000). And then, you pay your closing costs, your mortgage insurance premium fee, your servicing fee, the credit counseling fee and so on. It could really add up to a lot. It might seem like a good idea if you end up living in the house for a long time. If you don’t for some reason, all of this will be money poorly spent.
If the reverse mortgage you are considering is to help you pay back money you owe somewhere or something, you should probably look for more affordable options. If for instance you want money for home repairs, you can find special grants for it. And then, there is the matter of getting taken advantage of when you apply for such a loan. Insurance sellers target people who have just received a lump sum for their reverse mortgage. They get them to invest it in some kind of a long-term care insurance policy. They promise them that they will receive generous annuities every year. They just never tell them that the annuities will probably not start before they die.