Reverse Mortgage Ripoffs
A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD’s reverse mortgage provides these benefits, and it is federally-insured as well.
I want to remind you that there are also some issues with reverse mortgages. Reverse mortgages can be expensive since the fees can be high. The loan officer can help to reduce these fees by accepting less than what is commonplace. I have always felt that the fees were too high and make adjustments on an individual basis based on the loan amount.Another issue that has recently emerged is the combination of a reverse mortgage and other inappropriate financial products. This seems to be double dipping for fees and may not be in the best interest of the homeowner.
The high costs associated with a reverse mortgage loan, make is very difficult to come out ahead using the proceeds to buy annuities, other insurance products, or securities. I would be wary of anyone who links a reverse mortgage pitch with a push to sell a senior something else. Borrowing money from a reverse mortgage for investment purposes is almost always a bad idea. Make sure that you consider not just the potential gains but the loan costs and tax effects of any investment deal.
Better yet, give me a call.
For more information on Reverse Mortgages click here.
Mark Clawson 702-351-7912
