By now you’ve probably heard about reverse
mortgages. The idea behind it is quite simple. Instead of getting a home
loan and paying the lender, the lender will be the one who’ll make payments to
you. Such payments could be in the form of a lump sum or a regular monthly
payment. Whatever option you choose, you won’t be required to repay the
mortgage until you die or decide to move out of your home.
Even if this seems like a good deal for you, the truth
remains that reverse mortgage loans are controversial. Some say that this type of loan should be
part of one’s retirement
plan. Seniors who are in need of extra money can tap into the home equity,
which will be their most valuable asset.
But critics say that reverse mortgages are associated with
substantial fees and the balance on the loan increase as time goes by. Plus,
reverse mortgages that were not made via an FHA program
don’t have enough consumer protection, which could leave you or your estates on
the hook in case the house loses value.
Before you make a decision, here are a few things you need
to know about the pros and cons of reverse mortgages.
The Pros of Reverse Mortgage
- May
receive regular income provided that you live in the house as your primary
residence.
- Payments
you get from a reverse mortgage are not taxable
- FHA
reverse mortgage loans are considered as non-recourse loans and that means you cannot owe much more than the existing value of
your house.
- Payments
do not need to be made on the loan until you decide to move, sell the house, or
you die.
The Cons of Reverse Mortgage
- You
should be at least 62 years old to get a reverse mortgage loan via the FHA
program
- There
are many costs to obtaining this kind of loan including but not limited to mortgage insurance.
- Your
estates might not be able to retain the house in case they can’t afford to
repay your debt.
- In
case you can’t stay in the house because of your long-term needs then the
reverse mortgage loan will become due.
-
Always remember that even if you are not required to make repayments
for your reverse mortgage Greenville, you will still be held responsible for covering other fees like
the maintenance costs, homeowners insurance, and property taxes.
If you fail to meet these requirements, your house may be
foreclosed on. It is crucial to make sure that you have money available to
cover these expenses because if you don’t, you may run the risk of losing your
home. Some lenders would set up a set aside account so you can deal with the
aforementioned costs, moving a portion of the loan into the account. But this
set aside account will not guarantee that you will always have the cash to
cover these expenses. So be sure to pay close attention and that you are
updated.
If you want to understand how reverse mortgages work, then you should call Reverse Mortgage Specialist now.
David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/
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