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Reverse Mortgage Pros Cons For American Seniors

reverse Mortgage pros consA reverse mortgage allows a senior homeowner in America who is ‘cash poor & house rich to receive monthly cash payments or a lump sum of cash directly from their lender in exchange over time the lender is actually gaining back the equity of the home. This allows senior homeowners to live in their home while the bank pays for them monthly to be there. lets take a look at the reverse mortgage pros cons now.

Reverse Mortgage Pros Cons

  • receive monthly or lump sum money now
  • Live in your home without making monthly mortgage payments at all
  • Eliminate your existing mortgage or mortgages
  • Heirs are not personally liable if payoff balance exceeds the home value
  • Heirs inherit remaining home equity after paying off the reverse mortgage loan
  • Proceeds are all tax-free
  • Interest rates may be lower than most other options

Reverse Mortgage Pros Cons

  • Value of estate inheritance may decrease over time as proceeds are spent
  • Sometimes fees are higher than going with a traditional mortgage
  • Initial Federal Housing Administration (FHA) mortgage insurance premium
  • Ongoing FHA mortgage insurance premiums
  • Loan origination fee may be higher than a traditional mortgage (Some lenders Charge more then others)
  • Although Social Security and Medicare eligibility are not bothered by a reverse mortgage loan, need-based government programs such as Medicaid can be affected with specific program requirements
  • Reverse mortgages are not widely understood by many people
  • Reverse mortgages still  remains a popular lure for cash-strapped seniors, but what’s great in theory is often abysmal in execution.
 

Here are the Reverse Mortgage pros and cons of reverse mortgages

But what’s good in theory is often dangerous in reality because of some unsavory players in the mortgage world, especially unholy alliances of mortgage brokers and insurance salesman. When choosing your reverse mortgage, you can either receive a check every month from your bank / lender or take a lump-sum of cash out. The real danger comes with the latter. Taking a lump sum cash-out option puts you right in the crosshairs of sleazy insurance sales folk who will push a series of annuities on unsuspecting seniors. This is just an absolute, horrific abuse of trust and of an american senior citizen. Here’s the thing. If you have an elder in your life, you should get a little nosy. While you’re busy with your life, somebody could come along and eviscerate their finances if you’re not careful. Consumer Reports  puts it bluntly: “Reverse mortgage should only be a last resort for seniors who want to stay in their homes and have no other alternatives.” If you’re talking about a family with younger members of means, it is generally better to have them  help out aging relatives than to have a broker or salesperson take advantage of the senior with a reverse mortgage. We agree whole heartedly. A reverse mortgage loan should be the last option on the list, not the first, when all else has been exhausted. Beware that some scamsters or swindlers are sending deceptive info to seniors. Consumerist.com reports that some of these reverse mortgage pitches were marked on the envelope with words like “Economic Stimulus Notice,” “Government Lending Division,” and “Federal Housing Administration Home Benefit HECM Program.” Some of these come-ons even falsely claimed that your heirs will still be able to inherit your house, which is untrue. Be careful out there! It’s a dogie dog world. Just know all the reverse mortgage pros cons before moving forward with any reverse mortgage loan for yourself or the elder in your life. If you would like to weigh your options and speak to a reverse mortgage specialist that is trustworthy click and request a personal quote below. reverse-mortgage-calculator

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