|
Reverse Mortgages Home
What are Reverse Mortgages?
Who is eligible for them?
Types of Reverse Mortgages
Why choose Reverse Mortgages
Paying back Reverse Mortgages
Questions to ask lenders
Their disadvantages
Reverse Mortgage requirements
Origination and MIP Fees
Dealing with closing costs
The process of getting one
What is the HECM?
Appraisal Fees
Servicing Set-Aside
| |
Reverse mortgages sound great on paper, but they are not for everyone. All other alternatives should be considered first, including selling your home and moving to a less expensive property. There are several disadvantages to reverse mortgages.
One major disadvantage is that if you were to decide to pay of your mortgage early, you would face a substantial interest penalty. In addition, you may find that the interest on your loan quickly eats up an amazingly large chunk of the worth of your home, especially if your home is not quickly increasing in value.
Your decision to choose a reverse mortgage may center on how much you really like your home. If you love your home so much that you cannot bear to leave it, then a reverse mortgage may be the best choice. However, if you could deal with going to another home, that is going to be your best choice.
Also, you need to consider whether your home and neighborhood will be fitting as you grow older. In addition, do you feel comfortable taking on this debt and can you afford potential penalties? Other questions may include whether to choose a lifetime or term annuity. Generally life annuities are better for those who are over 70, while those closer to 60 should consider term annuities to help reduce payment size
Finally, one word of warning. Reverse mortgages should not be used for short-term money problems. You will be greatly reducing the estate you are leaving for your children, and you may inadvertently cause difficulties for them as well. Have any paperwork reviewed by your lawyer, if he or she has experience in this area, to be sure that everything is in proper order.
|
|
|
