Reverse Mortgage Home Equity Loan-why It Might Not Be Right For You.
- Date: 2007-03-26 - Word Count: 376
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Reverse mortgages have gotten a lot of publicity lately and will probably get a lot of press in the future as baby boomers near retirement age. A reverse mortgage is a home equity loan that you do not repay as long as you live in the home. You must be at least 62 and the house must be debt free or you must be able to pay off the debt other wise you can not qualify.
The reason it is called a reverse mortgage is because it is the opposite of a regular home equity loan where you reduce debt and build up equity. In a reverse mortgage you reduce equity and build up debt. That is where the money comes from.
We have explored the many benefits of a home equity loan reverse mortgage and why they are a Godsend for many people. But they're not the answer for everyone.
There are many big time issues that need to be explored before you sign on the dotted line for a reverse mortgage home equity loan. Maybe that is one of the reasons why it is mandatory that everyone go thru counseling with a trained counselor prior to executing the documents for the loan.
The biggest issue that needs to be decided is whether or not you are going to stay in the house. There may be many emotional reasons with fond memories for this. This cannot be taken lightly. What are the options? Where will you live? How much will it cost?
For many, long term care is a looming expense that is huge. Without insurance to cover it the home may be a source of funds to pay for this almost certain expense.
The home may be the best (only) asset in their portfolio.
On the surface it is a no brainer, for many people though there can be many mitigating circumstances that muddy the water making it NOT the right thing to do. Do your homework and get your mandatory counseling before making this huge decision. Check AARP as an additional resource.
Jack Krohn is a leading free lance writer on Home Equity and Mortgage issues with over 35 articles to his credit. He is also the #1 author of Home Security Articles in the country according to Ezine Articles.
The reason it is called a reverse mortgage is because it is the opposite of a regular home equity loan where you reduce debt and build up equity. In a reverse mortgage you reduce equity and build up debt. That is where the money comes from.
We have explored the many benefits of a home equity loan reverse mortgage and why they are a Godsend for many people. But they're not the answer for everyone.
There are many big time issues that need to be explored before you sign on the dotted line for a reverse mortgage home equity loan. Maybe that is one of the reasons why it is mandatory that everyone go thru counseling with a trained counselor prior to executing the documents for the loan.
The biggest issue that needs to be decided is whether or not you are going to stay in the house. There may be many emotional reasons with fond memories for this. This cannot be taken lightly. What are the options? Where will you live? How much will it cost?
For many, long term care is a looming expense that is huge. Without insurance to cover it the home may be a source of funds to pay for this almost certain expense.
The home may be the best (only) asset in their portfolio.
On the surface it is a no brainer, for many people though there can be many mitigating circumstances that muddy the water making it NOT the right thing to do. Do your homework and get your mandatory counseling before making this huge decision. Check AARP as an additional resource.
Jack Krohn is a leading free lance writer on Home Equity and Mortgage issues with over 35 articles to his credit. He is also the #1 author of Home Security Articles in the country according to Ezine Articles.
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