Is a reverse mortgage a safe, legit method to access some equity from my property?
I have some debts from helping my kids go to college and another opening a restaurant, and don’t have the good credit anymore to get an additional equity credit loan.
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InfoDoc posted: 25 May at 6:49 am
A reverse mortgage can be a great way to go if you have plenty of equity in your home. Make sure to do your research, as there are many unscrupulous agents out there taking advantage of seniors with very bad terms and false misleading information. Here is a pretty good site with a lot of good tips and resources:
http://www.reverse-mortgage-information.biz
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Bibs posted: 25 May at 7:20 am
Just remember that at the end of the mortgage, they will own your property.
Age of Reason posted: 25 May at 7:29 am
Depends on your age, how much equity is in the home.
rockinmywwurld posted: 25 May at 7:57 am
No, they will NOT own your property. You would have to live until you are 150 for that to happen. They only give you a percentage of your homes value, and it is also based on your age. You have the option to pay off the reverse mortgage if you are able to at some point. When you pass on, your next of kin can pay the mortgage, or sell the house and keep the difference. But no one has ever outlived a reverse mortgage. Do the research and you will see what I mean.
glenn posted: 25 May at 8:48 am
Most people I know that have a reverse mortgage end up owing more than the house is worth. They still have the right to live there until they die or until they permanently move out of the property. At that time you or your heirs can pay off the mortgage or let the home go into foreclosure.
It is a non recourse loan – meaning that in case of any shortage the mortgage company can not sue you or your estate for the difference.
DeeDee posted: 25 May at 9:21 am
many reverse mortgages do in fact mean that once you die, the property now belongs to the lender that you signed with. It is not a safe way to go for the most part.
chatsplas posted: 25 May at 9:21 am
Sometimes
But very risky
Be very careful, read documents carefully
godged posted: 25 May at 9:59 am
Safe in some cases, you will have to sit down with a reputable reverse mortgage lender to see if this makes sense in your situation. Your credit situation may preclude you from getting a reverse mortgage. If you do this, do not tell your kids or they will be there with their hands out.
BC posted: 25 May at 10:07 am
Yes, reverse mortgages are safe, and they are legitimate as well. Reverse mortgages are insured by FHA, so it’s a given that they are the real deal.
A reverse mortgage can be a good way for a borrower to access equity from a home, and good credit is not a requirement. A reverse mortgage allows the borrower to take cash out of the home, up to certain limits, for homeowners age 62 and over who have adequate equity in their homes. All existing liens must be paid off with the proceeds of the reverse mortgage, and any remaining proceeds could then be accessed by the borrower.
The biggest advantage of the reverse mortgage is that it does not require that monthly payments be made to pay off the loan. Interest accrues each month, and the loan is generally paid off when the last remaining borrower passes away or does not occupy the home as their primary residence for a 12 month period.
See a local lender in your market who can review your situation and help you determine if you are eligible for a reverse mortgage and if it is the right loan for you.