Reverse Mortgages-The Dark Side!
1. LENDER PROFIT. Lenders make great money on these loans. They are more costly to the consumer than a regular mortgage.
2. MINIMAL RISK. Risk to the lenders is minimal. After all they are secured by the borrower's house.
3. THE MARKET. Over 72 million customers will become eligible for the product in the next 5-10 years as baby boomers turn 62-a huge market!
There are several points that borrowers need to be up to speed on. You've seen that lenders want you to get a reverse mortgage for the points made above. Borrowers need to consider many things as well.
1. CONSIDER ALTERNATIVE LOANS. Reverse mortgages can be an expensive way to borrow money. Get free counseling.
2. CONSIDER PUBLIC BENEFITS. Even though the proceeds are tax free they may impact on your eligibility for certain need based public benefits such as Medicaid and Supplemental Social Security Benefits. Get free counseling.
3. CONFUSING OPTIONS. There are many options available with reverse mortgages. Get free counseling.
4. SHOP AND COMPARE. Like anything you want to buy that is a big ticket item you really need to shop and compare costs and benefits from the myriad of lenders out there. Get free counseling.
The real gist of my concern here is just an observation. You have two key ingredients that traditionally have made for abuse in other areas. They are in play here so there is potential for abuse.
1. LOTS OF MONEY. Money unfortunately acts like a magnet when it comes to abuse. There are very few motivating factors in the world that surpass money. And there is lots of money in the mortgage market. Get free counseling.
2. AGE DEMOGRAPHICS.Senior citizens for years have been the target of many an unscrupulous scam artist. That is the market for reverse mortgages-senior citizens. Get free counseling.
There are many great points to getting a reverse mortgage. As a consumer you need to have your eyes open and do more due diligence than normal. And did I mention there is FREE COUNSELING available thru HUD approved counselors.
Your quest for the BEST deal on a home loan starts with knowledge and information-you can't have too much of either.
Related Tags: mortgage, home equity loan, reverse mortgage, home equity loan rate, mor, home equity loan refinance
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