2007-06-02 05:23:21 · 4 answers · asked by cammiedawn1970 1 in Business & Finance ➔ Personal Finance
Reverse mortgages are not (typically) a scam. What you're doing is selling your house, but you are allowed to live in it until the balance is paid. When the new owners have satisfied their debt to you, then you must move out.
2007-06-02 05:30:12 · answer #1 · answered by kaylora 4 · 0⤊ 0⤋
Basically, the homeowner "sells" his house in exchange for a certain amount of money to be paid for a certain number of years. There is a guarantied minimum amount of money that will be paid, in case the owner dies shortly after the reverse mortgage is signed. However, should the owner live an exceptionally long time, he can be thrown out of the house (because he is no longer the owner) at a certain point and receive no extra money.
Whether it is a good idea depends upon the home owner's particular circumstances. A certified financial planner is the person from whom to seek advice if you are considering this. For some people it is great, for others it is a rip-off.
2007-06-02 21:24:59 · answer #2 · answered by mcmufin 6 · 0⤊ 0⤋
A reverse mortgage isn't a scam. It's typically for older people who need to get some of the equity out of their house to live on, but don't want to sell the house and move. The reverse mortgage pays THEM a certain amount every month - the overall balance on this, including interest, is due when the house is ultimately sold or they die.
2007-06-02 12:29:30 · answer #3 · answered by Judy 7 · 0⤊ 1⤋
It's not a scam, but it only works if you already own your home and it's completely paid for.
2007-06-02 12:51:27 · answer #4 · answered by Gypsy Girl 7 · 0⤊ 0⤋