Does Anyone Have A Reverse Mortgage ? Need Info On Pros & Cons?
Reverse mortgages are great for the right people. The government insured HECM and government sponsored Home Keeper, are special loan products design for seniors, so that they can use their home to stay in their home. The bank pays you versus you paying the bank. You never make a single payment until you permanently leave your home, or past it to your estate.
Reverse mortgages are highly regulated and very misunderstood by the public. The HEMC and Home Keeper have been around for over twenty years, yet the same myths and false information about reverse mortgages keep getting repeated.
The pros are you can get the money you need to live, medical care, home care, property taxes, home insurance, home improvement, vacations, get out of foreclosure, buy a second home, what ever you want.
The cons are there closing costs as with any mortgage, and in theory you equity in your home decreases. I say in theory, as over the past several years when prices were increasing, many seniors were seeing equity gains even with their reverse mortgage.
It is often repeated that the fees are excessive. The truth is the fees are about the same as traditional forward mortgages. The difference is that with a tradition mortgage you borrow all the money at the closing at one time. With a reverse mortgage you are borrowing the money over time. So at closing, the fees seem very high, but over time as you borrow more, the fees are a smaller and smaller percentage of what you have borrowed.
The other con is that you may not be able to borrower as much as you want.
You didn’t say why you are thinking about a reverse mortgage – your need or wish. The number one option to a reverse mortgage is to sell your house and downsize.
For basic information on reverse mortgages go to: http://www.mtgmortgages.com/reverse_mort…
For information on reverse mortgage programs go to: http://www.mtgmortgages.com/reverse_mort…
For correct information on some of the myths you will hear about reverse mortgage go to: http://www.mtgmortgages.com/reverse_mort…
For links to other reverse mortgage on-line publications go to: http://www.mtgmortgages.com/reverse_mort…
I would also recommend seeing an Elder Law attorney and putting your home in a Life Estate or Trust to protect your home’s equity in case you ever need Medicaid. Depending on the State which you live in, the State will not make you dip into your home for Medicaid if the equity is 500K to 750K or less. But, the State will put a lien on your property for all the Medicaid benefits you receive from them.
A Life Estate or Trust can help protect your home equity from the government. As Reverse mortgages are design for just for seniors, the loan programs allow for you to have a Life Estate or Trust, versus traditional mortgage, which do not allow it.
Reverse mortgage rates are regulated, so the rates are the same no matter were you go for the loan. The reverse mortgage rates currently are all adjustable. There is a mortgage company marketing a “Fixed Rate HECM”, but FHA/HUD, which insures the true HECM loan product, offers no such program at this time. This is a bait and switch tactic to get seniors to call.
The closing costs are also regulated, so there is not much difference form company to company. Thus, shop for the most helpful and knowledgeable loan officer.
If you want some figures to look at, email me and I will send them to you.
Good luck.
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