Category: mortgage

Reverse mortgage marketing often make reverse mortgages sound like a great thing with no downside, while there are definitely benefits to having a reverse mortgage there are also disadvantages. Understanding the reverse mortgages pros and cons is important as it affects your loved ones as well. It is important that you inform and discuss the matter of taking up a reverse mortgage with your heirs. Failing to do so may cause friction among family members sometime down the road.

Pros And Cons

On the pro side of reverse mortgages pros and cons is that your credit history, income, and savings are not taken into account when you are being considered for a reverse mortgage. These details can often jeopardize your ability to receive a loan. Instead your age, value of your home, health, and home equity are considered.

If you do not completely own your home you can still be considered for a reverse mortgage, another one of the pluses when looking at the reverse mortgages pros and cons. This is great if you are really strapped for cash and need some extra money to keep you going. However it is important to know that this pro on the reverse mortgages pros and cons list comes with a negative. The balance that you owe on your home will be added to your reverse mortgage balance.

There is a measure of flexibility when taking out a reverse mortgage that is not usually associated with loans of any kinds. One of the pros on the reverse mortgages pros and cons is that you can choose the way in which you receive the money from your reverse mortgage.

Many people choose to receive a line of credit that they can borrow from whenever the need arises. However you can also choose to receive the money in a lump sum or in monthly payments. There is even the option of combining these different payment methods to suit your needs.

One downside to reverse mortgages pros and cons is the fact that you may find yourself leaving less home equity to your heirs. This is because the majority of reverse mortgages are paid back from the proceeds of a home after an owner s death.

This can be a very delicate situation that needs careful discussion with all members of the family involved. Although reverse mortgages can be very helpful in easing financial hardship they are not for everyone. Evaluate the reverse mortgages pros and cons carefully before deciding if you are a good candidate for this loan.

Finding the right reverse mortgage lender is an important step to processing your reverse mortgage. However before you even talk to a reverse mortgage lender there is the small matter of seeing a counselor. Anyone interested in applying for a reverse mortgage is obligated by law to see an independent counselor who will then issue a certificate to prove that the counseling session has taken place.

Sounds like red tape? It is just one of the safety measures put into place to protect you and your money. The reverse mortgage has been designed to keep your money safe. Counseling is a great place to hear the reverse mortgage pros and cons.

Finding A Lender

Finding a reverse mortgage lender is actually very simple. All reverse mortgage lenders belong to the National Reverse Mortgage Lenders Association. This association has a code of conduct that specifies the responsibility of lenders to clients. Finding a lender in your area is a matter of simply visiting the NRMLA website and selecting your state, you will then be provided with a list of companies that offer this service.

The Right Choice

The right reverse mortgage lender is invariably one that offers you the best rates. This will mean some research on your part. Look carefully at the rates being offered to you and decide what works best for you. Most reverse mortgage lenders have standard and capped interest rates, which means that you might not find a vast difference in rates and interest fees being offered to you. Make sure that any company you work with has signed the NRMLA Code of Conduct and is listed on its website.

The best way to ensure you are making the right choice is to ask as many questions as possible. If there s anything on your mind don t be afraid to ask. You should feel like you are being treated fairly, competently, and with professionalism. If you feel that certain reverse mortgage lenders are not behaving professionally then look somewhere else.

You need to feel comfortable when taking out a reverse mortgage. You should also keep in mind that a reverse mortgage is meant to make your life easier. This loan is not meant to cost the earth, in fact many safety measures have been put into place so that it remains a low cost loan. There should be no prepayment penalty if you decide that you would like to pay back the loan before permanently moving out of your home.