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Reverse Mortgages: Examples of Predatory Lending as Well?
Not Personally, dick p, but Apparently you don't Wish to Inform Anyone.
Thanks K, What I Suspected. The Money Must Be Coming From Somewhere.
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| By
mdGreg C |
Posted on
02/28/08 Total Answers
8 |
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| Answers- |
| NO |
| Answer by :
Beverly S On Date
2008-02-28 12:36:20 |
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| don't know what you writing about? |
| Answer by :
dick p On Date
2008-02-28 12:37:52 |
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| Maybe. Depends a lot on the circumstances (how long, interest rate, how much money, etc.) Here's an interesting statistic... Of a couple reaching 65, the average age of the SECOND to die is 90... So, if you had a 30-year reverse mortgage, it would be possible to outlive it... (And I don't think most are 30-year.) |
| Answer by :
casual_observer_50 On Date
2008-02-28 12:39:07 |
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| No. You don't understand what a reverse mortgage is, do you? They are generally very safe plans....
Top Ten Things to Know if You're Interested in a Reverse Mortgage
Reverse Mortgages are becoming popular in America. The U.S. Department of Housing and Urban Development (HUD) created one of the first. HUD's Reverse Mortgage is a federally-insured private loan, and it's a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more. You can receive free information about reverse mortgages by calling AARP at: 1-800-209-8085, toll-free. Since your home is probably your largest single investment, it's smart to know more about reverse mortgages, and decide if one is right for you!
1. What is a reverse mortgage?
A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD's reverse mortgage provides these benefits, and it is federally-insured as well.
2. Can I qualify for a HUD reverse mortgage?
To be eligible for a HUD reverse mortgage, HUD's Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area.
3. Can I apply if I didn't buy my present house with FHA mortgage insurance?
Yes. It doesn't matter if you didn't buy it with an FHA-insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.
4. What types of homes are eligible?
Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for individual condominiums units to qualify under the Spot Loan program.
5. What's the difference between a reverse mortgage and a bank home equity loan?
With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You don't make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."
6. Can the lender take my home away if I outlive the loan?
No! You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home's value.
7. Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD's reverse mortgage loan. This debt will never be passed along to the estate or heirs.
8. How much money can I get from my home?
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.
9. Should I use an estate planning service to find a reverse mortgage?
I've been contacted by a firm that will give me the name of a lender for a "small percentage" of the loan? HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.
10. How do I receive my payments?
You have five options:
* Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
* Term - equal monthly payments for a fixed period of months selected.
* Line of Credit - unscheduled payments or in installments, at times and in amounts of borrower's choosing until the line of credit is exhausted.
* Modified Tenure - combination of line of credit with monthly payments for as long as the borrower remains in the home.
* Modified Term - combination of line of credit with monthly payments for a fixed period of months selected by the borrower. |
| Answer by :
quantumrift On Date
2008-02-28 12:39:24 |
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| No. It's still important to review the terms. |
| Answer by :
Sahara On Date
2008-02-28 12:40:30 |
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| Many construction loans are reverse... you do not make a payment until the home is complete or for the 1st year, and your interest is tacked onto the loan balance. |
| Answer by :
reddyme04 On Date
2008-02-28 12:51:20 |
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| There are many reverse mortgage scams abound. Pretty sick to prey on senior citizens, but, hey, this is the world we're living in...apparently.
If lenders are plugging in inaccurate interest rates in their online calculators, this will caue inflated cash-out figures.
Some Reverse Mortgage lenders are not approved by the Department of Housing and Urban Development (HUD) to offer HECM reverse mortgages. Some companies claim to have HUD approvals originating Reverse Mortgages and are attempting to charge rates and fees in excess of those mandated by HUD. This is illegal. Probably a good idea to check the HUD website to verify that your Reverse Mortgage lender is truly authorized to originate HECM Reverse Mortgages.
A good idea to stay away from anyone offering the senior the “opportunity” to obtain more money in exchange for giving up a percentage of the future value of the home since the federally insured Home Equity Conversion Mortgage (HECM) does not have an equity sharing or shared-appreciation feature.
A good idea to not choose a Reverse Mortgage lender by simply looking at websites on the Internet. The Internet is full of reverse mortgage scams, ranging from phony calculators to false offers of hard cash.
One example of a reverse mortage scam:
http://www.chipleypaper.com/news/reverse_1365___article.html/hud_mortgage.html
There are many others. Type in "reverse mortage" and "scam" into Yahoo and just see how many hits you get. |
| Answer by :
Kynysca On Date
2008-02-28 15:51:52 |
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| You bet! The suckers and the desperate are always with us, poor sods. The education and economic system manufactures them and the culture cultivates them. Where would the upper ten p.c. be without the victims to swallow the propaganda and the bait? |
| Answer by :
shahbarak On Date
2008-02-28 16:16:57 |
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