Lender411 Featured Article: 8 Common Reverse Mortgage Misconceptions
By Daniel DuffieldIn the wake of the economic downturn, an increasing amount of elderly Americans have sought financial relief through reverse mortgages. These mortgages provide homeowners age 62 and up with the ability to tap into the equity which has been accumulated in a property through a home mortgage. However, due to their unusual terms, reverse mortgages can be confusing to borrowers with experience in traditional mortgages. From this confusion, many myths have arisen about the negative aspects of reverse mortgages. To clarify these issues, here are the most common misconceptions regarding reverse mortgages:
- The lending institution assumes ownership of the home in a reverse mortgage transaction. Under a reverse mortgage, borrowers never relinquish ownership of the property. Rather, the homeowner receives payment based on the amount of equity being cashed in. With no change in title possession, homeowners will still be required to stay current on property taxes, keep the home in good repair, and maintain applicable insurance on the home.
- By securing a reverse mortgage, a homeowner is at risk of losing his or her home. Since ownership of the property never changes, homeowners with reverse mortgages cannot lose their homes and can remain in the home as long as they comply with reverse mortgage regulations. Until the borrower passes away or moves from the residence, he or she may continue to live in the home.
For more information on reverse mortgages and other mortgage programs, visit Lender411.com.
About Me
Lead Content Developer of Lender411. Please add my Google profile to your circles.
Posts
Although a reverse mortgage has many potential benefits for senior homeowners, it also has its drawbacks. Reverse mortgages can have higher up front fees compared to other types of financing. As the homeowners get to retain the title of the home, they have the added burden of paying for insurance, taxes, maintenance and all other expenses related to the property. It is best to seek advice from a financial professional to see if a reverse mortgage is right for your situation.
ReplyDeleteRegards,
David from Mybondquotesa.co.za
An excellent point. While they have many advantages, it is absolutely true that reverse mortgages are not always advantageous and carry their share of drawbacks. For more information, check out this week's Lender411 Featured Article "Are Reverse Mortgages Risky for Boomers?" at www.Lender411.com
Delete