2007-12-25 13:54:07 · 12 answers · asked by Ms. J Dub 2 in Business & Finance ➔ Renting & Real Estate
The advantages are for the mortgage company and the disadvantages are for the homeowner. Stay away from this product it is full of fees and is usually a ridiculous interest rate.
2007-12-25 14:04:19 · answer #1 · answered by rhgizmo 4 · 0⤊ 4⤋
There is too much mis-information out there on this mortgage type. Any loan program which has FHA (Federal Housing Administration) involved is not all bad.
The lender does NOT own your home when you do this any more than a regular mortgage lender does on another home. It is simply a mortgage that requires NO monthly payment from the homeowner, which is ideal for a senior (only ones this is available to) who wants or needs to use their acquired equity to live on.
It is similar to a HELOC, without a repayment requirement until death or sale of the property, or a new loan. You are merely tapping the accumulated equity n the property in a lump sum, or usually a monthly stipend. Do you pay interest? - Yes, as with any loan that you take out, and yes, that can eat into your home's equity position. That's right, nobody lends you money for no interest - it is business.
The nice thing is that there is required counseling to go through so the homeowner will fully understand the mortgage limitations before fully committing
2007-12-25 15:35:46 · answer #2 · answered by walkinandrockin 3 · 1⤊ 0⤋
My first suggestion is not to listen to most of the answers already given as they are WRONG.......With a Home Equity Reverse Mortgage (HECM) which accounts for 90% of Reverse Mortgages and Regulated by the Federal Govt. (HUD) it is Federal Law that you must always remain on title. You will always be the owner of the home ....the bank never ownes the home. I suggest you go to AARP.org, HUD.gov, ReverseMortgage.org. Part of the safeguards the Govt. has built in to Reverse Mortgages is third party counseling which is at no cost to you. AARP has counselors along with Money Management International to name a few. They are fully versed in reverse Mortgages and will give you an independent view an whether one is right for your particular situation. You can look at these resources and gather a wealth of information and if it is right for you then proceed to a Reverse Mortgage Consultant. I don't know where you are but EverBank is a leader in the field and also my employer. I have been in the Reverse Mortgage field for over 2 years Feel free to contact me with any other questions.
Thanks
Stephen
2007-12-26 01:13:11 · answer #3 · answered by Anonymous · 0⤊ 0⤋
A Reverse Mortgage is a program that allows homeowners over 61 to retrieve or get back a sizable portion of the money that has paid into their mortgage.
This often amounts to hundreds of thousands of tax free dollars and it is possible that one never has to pay back the monies as long as the person(s) live in the house.
There are many benefits and a few drawbacks that anyone seriously thinking about this program should consider.
Email me your phone number if either you would you would like more details or a free computer generated Reverse Mortgage Analysis.
I really enjoy helping older folks in this arena. Thanks - Larry
2007-12-27 08:23:30 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Boy, the answers you got....not. Yes, the mortgage company basically buys your home, but they do NOT get the equity when you die, YOUR FAMILY DOES, NOT THE BANK. Here is how it works. Say you own a house and it is worth $350K and you only owe $78K. Depending on your age, you must be at least 60 on one program and 62 on FHA programs, the bank will lend you a % of the value. The younger you are the less they will go on the value. So, say you are 65, they will give you a loan to 50% of the value. That comes out to $175K, this will pay off the $78K you owe and you get the other $97K. You can take the 97K in monthly payments, a lump sum or a little of both. When you die or sell the house you pay off the $175K and the rest of the equity is yours or your family's. Depending on your age and health, there are other options.
2007-12-25 14:09:41 · answer #5 · answered by Sharon B 3 · 1⤊ 1⤋
It's a mortgage in reverse, and designed for old people who own a home, but do not have enough money to live on. The lending institution pays you a monthly stipend, until either: (1) You die, or (2) The "loan" is repaid. You can remain in the home if item 2 happens. If house values continue to escalate, you might never live long enough to see the loan being paid in full. On death, the lending institution inherits the home, paying the estate any differences not yet paid.
2007-12-25 14:07:57 · answer #6 · answered by Jeannie 5 · 0⤊ 1⤋
The reason they distinguish between racism and reverse racism is because they each have quite different causes, and the cause of any type of racism is very important (since it needs to be changed!). The two also occur to people in rather different circumstances, and the effect on the people involved is therefore different. You're right, though, it is still racism.
2016-05-26 05:53:07 · answer #7 · answered by ? 3 · 0⤊ 0⤋
Reverse mortgages aren't available until a certain age, usually 60 or over. For someone that age with a lot of home equity but little income, they can be very good.
2007-12-25 14:02:51 · answer #8 · answered by Judy 7 · 0⤊ 2⤋
Type in reverse mortgages on your search engine and there you will find all you need to know.
2007-12-25 13:59:29 · answer #9 · answered by mtchndjnmtch 6 · 0⤊ 1⤋
check with AARP on 'reverse mortgages' beware of excessive regressive fees.
not the best product on market.
2007-12-25 14:37:20 · answer #10 · answered by Anonymous · 0⤊ 2⤋