Does anyone know anything about the benefits and drawbacks of reverse mortgages?
By
zww
Posted on
03/01/08 Total Answers
4
Answers-
The fees associated with some of them can be very high, so you'll end up giving as much as 5 digits in fees up front to the mortgage company, significantly reducing your equity.
The reverse mortgage also means it is unlikely your heirs will be in a position to keep your house so if you have a dream of your children some day living in your house forget it.
I would talk to a trusted financial adviser before getting a reverse mortgage and be sure that you have an attorney review of the agreement.
Answer by :
Huh? On Date
2008-03-01 17:36:36
Benefits of reverse mortgage are (1) through this type of loan from a bank, you get to tap into the equity buildup of your home without having to pay monthly loan payments; (2) you get to keep living in your home until you die or sell; (3) can substantially increase monthly cash flow. Drawbacks are (1) your equity keeps going down while your debt continues to rise; (2) the upfront costs to get a reverse mortgage are usually much higher than a forward mortgage; (3) the loan you take out is usually a variable interest type, so the initial interest rate can rise, increasing your debt even faster.
You also have to be 62 years + to qualify for a reverse mortgage.
Answer by :
Peter C On Date
2008-03-01 17:37:40
A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month. No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older. More information about reverse mortgages can be found here......
http://reversemortgageresource.blogspot.com
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Answer by :
oncameratalent On Date
2008-03-01 17:53:50
They are just a gimmick for old folks who don't know how to manage their finances. They are essentially a credit line on a property with alot of equity. If the borrower can qualify for a conventional loan and manage the proceeds then it's always better.
