Advantages And Disadvantages Of A Reverse Mortgage
With any new venture, there is the good and the bad. Let us look at the advantages and disadvantages of a reverse mortgage. One of the biggest advantages is no re-payments while you live in your home. This is a big draw for seniors looking for a loan. Many seniors opt to pay off their current loans and house payments. The second advantage is that you can live in your home as long as you wish. The amount you owe can never be more than the housing worth. There are also different withdrawal options.
You can choose to get your money in a lump sum, monthly installments, line of credit or a combination of all three. The decision is yours. The loan also has the benefit of tax-free proceeds. In fact, the IRS does not consider loan advances to be income. All those proceeds can go right into your pocket. Of course this is all determinant on the right lender too. Now that we have discussed the advantages, let us discuss the disadvantages. There are differences that people do not realize about reverse mortgages and conventional loans.
One disadvantage is the cost of a reverse mortgage, which can be very expensive. This is because of the rising-debt nature of the loans. A typical reverse mortgage may be $300 monthly with a yearly interest rate of 12% compounded monthly. Over ten years the homeowner could get $36,000 but owe $70,000! Another disadvantage is the complex contracts. The confusion from clients could hide hidden costs. It can become infuriating because the costs have no correlation to the amount borrowed. The third and most important disadvantage is the affect this could have on old age pensions, Medicaid and social security.
The problem is that many seniors are not aware of the advantages and disadvantages of a reverse mortgage and find out later. They realize that instead of getting more money they are losing money. There is the issue of a senior’s assets and estate. A reverse mortgage can actually reduce the value of these holdings. Down the road, it will affect any thing they may want to leave as an inheritance for their children and grandchildren. The only way to avoid these pitfalls is to choose your lender carefully. Then study the documents and do what is best for you.
KBC Sells US Mortgage Business - Emii.com
| ||
Mortgage modifications No. 1 gripe of consumers to Idaho AG (The Idaho Statesman) Mortgage modifications top the Idaho attorney general's list of complaints for 2009, a year in which the AG scored a record $7.4 million in restitution on behalf of residents and businesses... | ||
Reverse mortgages to be topic of Monday meeting - Journal Times
| ||
How your mortgage can lower your tax bill - Vancouver Sun
| ||
Did Woodstock hippies lead to US financial collapse? (The Christian Science Monitor) A conservative activist says hippies-turned-boomers are responsible for excessive spending, the mortgage crisis, and recklessness on Wall Street. He tells the story in his film, 'Generation Zero.'.. | ||
A HUD Reverse Mortgage Can Be Beneficial | Free Articles Directory With the prevalence of negative press about the so-called disadvantages of HUD reverse mortgages, as well as the news about senior homeowners being scammed by... | ||
Reverse Mortgage Legislation Update EUR February 25, 2010 - Reverse Mortgage Daily
| ||
Apply for a Reverse mortgage loan in Florida EUR Access supplemental . Applying for a reverse mortgage, also known a home equity conversion mortgage, could be a smart choice if you are retired and need a little extra income to help pay your medical bills and other expenses. a reverse mortgage is a safe ... | ||
Is A Reverse Mortgage A Good Option For Senior Citizens In Need Of Cash For Debt? - Red, White, and Blue Press (blog)
| ||
KBC Unloads SLN Reverse Mortgage Portfolio KBC sold its US reverse mortgage portfolio and said it will free up roughly $800 million dollars of cash in a company statement. The portfolio was previously held by a subsidiary of KBC Financial Prod... | ||
HUD Secretary Testifies on FY 2011 Budget Request "While the economy has a long way to go to reach full recovery, and the promising indicators emerging steadily are not being experienced by all regions or communities equally, it is clear that we have pulled back from the economic abyss ... | ||
Reverse mortgages can be useful, but do your research (KMIR 6 Palm Springs) The reverse mortgage is a financial tool that is growing in popularity. Designed as a means for elderly homeowners who have substantial home equity and wish to stay in their homes, a reverse mortgage can provide tremendous peace of mind to seniors and help them stay out of painful debt... | ||
Benny L. Kass Mailbag (Richmond Times-Dispatch) Varying options for co-buying with a child Q:My husband and I are in our 70s and are having a hard time maintaining our home both financially and physically. We are probably going to sell our house and move to New Jersey. Our daughter is a single mom and we would like to all get a house together. What is the best way to go for getting a mortgage (all three of us on mortgage or maybe our daughter ... | ||
Reverse mortgages to be topic of Monday meeting (The Journal Times) SOMERS - "Reverse Mortgages, the Pros and Cons" will be thetopic of the Adventures In Lifelong Learning (ALL) meeting at 2p.m. Monday in the University of Wisconsin-Parkside Student CenterCinema, 900 Wood Road... | ||
Apply for a reverse mortgage loan quotes from One Reverse Mortgage by Quicken . - Healthy Financial Habits
| ||
Apply for a Reverse mortgage loan in Florida EUR Access supplemental retirement . - Healthy Financial Habits
| ||
Technorati Tags: Reverse Mortgage, Advantages and Disadvantages of a Reverse Mortgage, Advantages And Disadvantages Of A Reverse Mortgage
