Reverse Mortgage
The Complete Guide to Reverse Mortgages: Turn Your Home Equity into Instant Income!
by Tyler Kraemer

This book was so helpful in informing myself and my parents as to the options available for them. It was easy to read and easy to understand. It gave many helpful hints and helped us figure out if a reverse mortgage was approriate for them.

It is essential if you or someone in your family is considering, or wants to learn more about, a reverse mortgage loan. It walks you through the process from borrowing to repayment in a conversational, easy-to-read format. You can read about real life situations that are very helpful for you to see how a reverse mortgage can work for you.

The book provides precise information on each of the types of reverse mortgages that are available. You will find information about the ways in which you can receive your payments, and all of the incumbent fees and costs that may come with this kind of loan are revealed. It outlines how to protect yourself and how you are already protected. Checklists are provided covering all the points to consider before making each decision, such as how to choose a lender.

     

Reverse Mortgage - Cons Reverse Mortgage

Reverse Mortgage * Cons Reverse Mortgage

Cons of a Reverse Mortgage   
Barry Waxler

Imagine paying $30,000 in costs to get a mortgage for $368,000 with a 9 percent interest rate.

Who in their right mind would? Well, welcome to the cons of the reverse mortgage!

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AFL-CIO Unveils Legislative Agenda, Takes Aim At CBIA (The Bristol Press)
HARTFORD — State labor leaders and union-endorsed legislators came out with “guns blazing” Thursday.

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The reverse mortgage is a relatively new financial product on the market. It is available to individuals 62 and older. The basic idea is a lender will make payments to you in exchange for an interest in your home. It is essentially a traditional mortgage where the bank pays you instead of you paying it.


The reverse mortgage is a controversial financial tool because the cons are so extreme. There is even an intermittent move afoot to remove them from the market. Why? Well, lets look a little closer at the cons or a reverse mortgage.

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Seniors Cope With Social (in)Security Struggles (The Palladium-Times)
Sen. Charles Schumer, D-N.Y., announced recently that he is pushing for legislation that would provide a $250 check to Social Security recipients who were denied a cost of living increase in 2009.

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The first disadvantage is cost. The typical costs you have to pay to get a reverse mortgage range from $10,000 to $30,000. The reverse mortgage has a cap of $368,000 or 50 percent of your equity, whichever is less. This means you are giving away up to 10 percent of your equity as a cost of getting a loan. That is outrageous!


The second disadvantage is the interest rate. Once the lender starts making payments to you, it charges an interest rate on the growing debt. Whereas traditional mortgages carry interest rates in the five to seven percent range, you will be paying 9 percent or more on yours. Keep in mind you are giving the lender your hard earned equity and it is charging you more for it! Also, this interest is not deductible.


Perhaps the biggest of the cons of a reverse mortgage has to do with control. Simply put, you are giving it away. For most people, their home represents their biggest asset. By entering into a reverse mortgage agreement, you lock up that asset. It might make sense to do so if you were getting a great deal, but you are not. You are getting a terrible deal. There is no need for you to pay outrageous costs and interest rates on the equity you have spent years building up. Don't throw away your equity!



Learn more about the disadvantages of a reverse mortgage at UFCAmerica.com.

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Index of Articles about Reverse Mortgage

What Other Authors say about Reverse Mortgage

What is a Reverse Mortgage? by Stuart Simpson has a neat mortgage calculator FREE to use. Try it out at:

Simply stated, a reverse mortgage is a loan that enables homeowners (age 62 and older) to convert part of the equity in their home into a tax-free income without having to sell the home, give up the title,...

What You Need to Know About Reverse Mortgages by Alan Ferguson

If you own your home and have a good deal of equity in it then you might be interested in a reverse mortgage. This is especially so if you have a low income or need money to help you fund your retirement,...

Reverse Mortgages For Seniors by David Glu

Reverse mortgage has become popular in America these days, these are special type of mortgage that helps an homeowner to convert his home equity into cash, this boost up the American older financial security...

Seniors can use a Reverse Mortgage to fund Annuities, Investments, and Insurance Policies. by Troy Shellhammer

For many seniors in or entering retirement, the prospect of purchasing long-term care, investments or annuities can be cut short by a lack of retirement income. Statistics show that 3 out 4 seniors will...

What Are the Advantages of Reverse Mortgages? by Mark Viner

<p>If you meet both criteria, then you are free to apply for a reverse mortgage from your local lending company.<p>Advantages of reverse mortgage over other mortgages<p>1.A homeowner...