Reverse Mortgage Information: What You Need to About the Good, the Bad, & the Ugly Side of Reverse Mortgages
If you or somebody you love is over the age of 62, this may be the most important article you ever read. The topic of discussion is reverse mortgages. More specifically, we'll discuss what reverse mortgages are, who qualifies for one, and what the benefits (and disadvantages) of using them are.
What is a reverse mortgage?
As the name suggests, a reverse mortgage allows a qualified senior citizen to draw the equity out of their home... essentially reversing the mortgage process. Instead of paying the bank, a mortgage holder is paid by the bank either in a lump sum or installments.
Who can qualify for a reverse mortgage?
To qualify, you have to be over the age of 62. You must also own a qualifying home, as determined by the lender and your area. Also, if there are any liens against the property they must be paid off with the reverse mortgage (the lender must be in first position).
What are the pros of getting a reverse mortgage?
What are the cons of getting a reverse mortgage?
We'll bring this discussion on reverse mortgages to a close with an answer to a common question: who is responsible for paying the debt once the borrower passes away.
As mentioned under the "cons" subhead above, reverse mortgages can be complicated. For those considering taking out such a loan, I would suggest seeking out the professional guidance at your local HUD office.
* The American Bar Association (ABA) has claimed that advances from a reverse mortgage may be considered liquid assets if left in a bank account longer than a year after receiving it. This bump in liquid assets may disqualify some for certain social programs. Consult a professional for more information on this.
© 2004 DailyWisdom4U.com All Rights Reserved reverse mortgage pros and cons