Reverse mortgages are one of the most misunderstood mortgage loans around. Reverse Mortgages are a way for seniors to create an income stream using the equity in their homes. As with any type of mortgage, there are risks and you need to research reverse mortgages to avoid being taken advantage of. Here are tips to help you avoid being ripped off.
If you are age 62 or older and own your home, you qualify for a reverse mortgage loan. Unlike the traditional mortgage you used to purchase your home, a reverse mortgage pays you. This loan is funded with the equity you have earned in your home and there are several options for payment. The lender can pay you in a lump sum, regular monthly installments, or a line of credit.
If you choose regular monthly payments these payments continue as long as you live in the home. If you move, sell the home, or pass on the mortgage will be due to the lender. It is important to keep your property taxes and insurance current; if you let either of these lapse the mortgage lender could call in your loan.
Now that you know the basics of reverse mortgages, how can you find a good lender that won?t take advantage of you? You need to do your homework and shop around from a variety of mortgage lenders and brokers. Spend a little time learning the ropes and you will save yourself many future headaches. You can start with a free mortgage guidebook: ?Five Things You Need to Know About Your Mortgage.?
