Vast Majority of Seniors Still Not Reverse Mortgage Versed
We've seen Robert Wagner on television, and if you are a senior, you are getting solicitations in the mail for a reverse mortgage.
Even with all of this information being thrown at us most sixty two plusers can't give a rudimentary explanation of how a reverse mortgage works.
That's why I'm here. I'm the answer man and I'm here to educate.
To understand a reverse mortgage you simply need to understand a traditional forward mortgage. A forward mortgage is simply a loan utilizing equity in the house to back the security of loan.
What I painted was not just the picture of a forward loan but a reverse loan as well. This is what i want to get across to all those who think this mortgage is something it isn't. There is too much bologne flying around.
They are very similar. They just works a little differently.
The lender is loaning money to you. You get to use that money for whatever purpose you desire. It's your money afterall.
There is any number of things we can do with the money from our mortgage. If its a purchase those proceeds are used to pay the seller. If it's a refinance it's limitless.
All I'm saying is the borrower taps the built up equity or money in the home to use for the borrower's benefit.
The benefit of the reverse mortgage is you do not ever have to make monthly payments to the mortgage company.
Well, if the lender isn't receiving payments how does it stay in business, and why would it do this?
Reverse mortgages are true negative equity loans. That means since the borrower makes no interest payments the interest accumulates and accrues against the equity of the home.
The bank is only repaid either when the borrower decides to make a full repayment or when the borrower dies and home is sold.
Important to note, because of all myths, is the borrower or it's family never loses ownership of the home during the mortgage.
The real hook to reverse mortgage, which is really helping many seniors in dire financial straights, is the lack of period payment to the lender.
Its not all a bowl of cherries for the reverse mortgage. High costs and possible negative equity positions for the borrower are just a couple of the downsides.
Even with all of this information being thrown at us most sixty two plusers can't give a rudimentary explanation of how a reverse mortgage works.
That's why I'm here. I'm the answer man and I'm here to educate.
To understand a reverse mortgage you simply need to understand a traditional forward mortgage. A forward mortgage is simply a loan utilizing equity in the house to back the security of loan.
What I painted was not just the picture of a forward loan but a reverse loan as well. This is what i want to get across to all those who think this mortgage is something it isn't. There is too much bologne flying around.
They are very similar. They just works a little differently.
The lender is loaning money to you. You get to use that money for whatever purpose you desire. It's your money afterall.
There is any number of things we can do with the money from our mortgage. If its a purchase those proceeds are used to pay the seller. If it's a refinance it's limitless.
All I'm saying is the borrower taps the built up equity or money in the home to use for the borrower's benefit.
The benefit of the reverse mortgage is you do not ever have to make monthly payments to the mortgage company.
Well, if the lender isn't receiving payments how does it stay in business, and why would it do this?
Reverse mortgages are true negative equity loans. That means since the borrower makes no interest payments the interest accumulates and accrues against the equity of the home.
The bank is only repaid either when the borrower decides to make a full repayment or when the borrower dies and home is sold.
Important to note, because of all myths, is the borrower or it's family never loses ownership of the home during the mortgage.
The real hook to reverse mortgage, which is really helping many seniors in dire financial straights, is the lack of period payment to the lender.
Its not all a bowl of cherries for the reverse mortgage. High costs and possible negative equity positions for the borrower are just a couple of the downsides.
posted by Credit Counseling at
2:47 PM
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