KIMT News 3 – You’ve no doubt seen the commercials and heard the advertisements, but chances are there is still a lot about reverse mortgages you may not know.
Their ads are hard to miss, but it’s what’s not being said that has financial experts warning us about tempting reverse mortgage loan offers.
These mortgages are known for being popular options for seniors looking to supplement their retirement funds. Finance experts say, many ads can leave homeowners with the impression that they’re risk-free.
These experts say that in many cases, people are unaware that there are costs associated with the loan that uses equity on your home for collateral.
“Be careful and do your research. We ask family members to be involved. Make sure that it is something that is going to be workable, so that you’re not signing something that you would be stuck in. We always ask that you be very careful about what you do,” said Kathye Gaines, Branch Manager with Consumer Credit Counseling.
The loan is available for those 62 and older and only if the youngest person in the household is 62 as well.
One negative aspect of the loan maybe that some outlive their loan money, forcing the responsibility of paying the loan on their family.
One common misconception experts say is that the loan is some type of government benefit. In reality, reverse mortgages have fees and compounding interest that must be repaid just like other home loans.
“You are able to stay in your home and you actually receive money from the equity that you have built in to your home,” said Gaines.
If you default on your loan however, the bank you finance with can foreclose on your home.
see more: http://kimt.com/2015/06/08/approach-reverse-mortgages-with-caution/
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