70% of Seniors Not Clear on Reverse Mortgage
Just open your mailbox or flip on the TV. In your mail your getting tons of solicitations and on TV are recognized spokespeople talking about the 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.
The reverse mortgage is no more than a mortgage on your home. A mortgage lender actually uses the equity you've built up in your home as security for the money they lend to you.
What I just described in the forward mortgage is really no different than the description of a reverse mortage. I want to be clear here in efforts of eliminating all odd ball notions of what it really is.
They are very similar. They just works a little differently.
The mortgage company doesn't really care what the money is used to purchase. It makes money on the interest and servicing of the loan.
That loan could be to refinance a current forward mortgage, cash to pay bills and other life expenses, or perhaps to make investments.
The point is you are accessing the equity in your home to accomplish something monetarily.
The benefit of the reverse mortgage is you do not ever have to make monthly payments to the mortgage company.
Of course that begs the question, "how does the mortgage company make money?" Now we're talking.
Mortgage companies and more particularly their investors are in the reverse mortgage business for the long haul. Money is made by the accrual of interest on top of what is loaned to the borrower.
The bank is only repaid either when the borrower decides to make a full repayment or when the borrower dies and home is sold.
The title to the home is never out of the borrower's name or the borrower's heir's names in the event the borrower passes on and wills the home.
The reason why everyone is so hot and heavy for reverse mortgages is the fact no monthly repayment is necessary. That is great.
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.
The reverse mortgage is no more than a mortgage on your home. A mortgage lender actually uses the equity you've built up in your home as security for the money they lend to you.
What I just described in the forward mortgage is really no different than the description of a reverse mortage. I want to be clear here in efforts of eliminating all odd ball notions of what it really is.
They are very similar. They just works a little differently.
The mortgage company doesn't really care what the money is used to purchase. It makes money on the interest and servicing of the loan.
That loan could be to refinance a current forward mortgage, cash to pay bills and other life expenses, or perhaps to make investments.
The point is you are accessing the equity in your home to accomplish something monetarily.
The benefit of the reverse mortgage is you do not ever have to make monthly payments to the mortgage company.
Of course that begs the question, "how does the mortgage company make money?" Now we're talking.
Mortgage companies and more particularly their investors are in the reverse mortgage business for the long haul. Money is made by the accrual of interest on top of what is loaned to the borrower.
The bank is only repaid either when the borrower decides to make a full repayment or when the borrower dies and home is sold.
The title to the home is never out of the borrower's name or the borrower's heir's names in the event the borrower passes on and wills the home.
The reason why everyone is so hot and heavy for reverse mortgages is the fact no monthly repayment is necessary. That is great.
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 Debt Consolidation Loan at
2:56 PM
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