Reverse Mortgage Reviews
There are several reviews about reverse mortgages. Homeowners who are at least 62 years who are living in their homes as their principal residence could draw money against the equity or value of the house by using a reverse mortgage. The size of the reverse mortgage a homeowner could access is not limited by the borrower’s income because the borrower does not make any payments. Besides, the loan does not have to be paid back until the term of the loan is reached, the borrower dies, the borrower does not stay in the house for 12 consecutive months, or the borrower sells the home.
As much as the reverse mortgage provides seniors some financial stability and opportunity to cater to their financial obligations, the reverse mortgage has its shortcomings, which require careful considerations before reaching a conclusion to obtain the mortgage.
However, below are some of the reviews about the reverse mortgage.
- One of the challenges some people complain about the reverse mortgage is the cost. The lender’s fees and underwriting fees, and appraisal fees that will be paid in the process of taking out a reverse mortgage could be more than $3,000. These costs will reduce the amount the homeowner can realize from the mortgage.
- In order to be eligible for a reverse mortgage, the senior must have a home that is free of liens according to the requirements stipulated by the Department of Housing and Urban Development. Any mortgages that remain on the home will be paid off at closing, and that will reduce the proceeds of the reverse mortgage.
- A reverse mortgage payment could be received in a single lump sum, monthly payments, a line of credit, or a combination. Irrespective of the method of payment, if the money is not used up immediately, the remaining amount will be considered as an asset if you apply for Medicaid.
- The homeowner cannot be absent from the home for more than 12 consecutive months even if it is a hospital or a nursing home. Such absence would prompt the loan repayment.
- When the homeowner dies, the mortgage has to be repaid with its interest. Based on the size of the debt, the home may have to be sold off instead of being passed to the heirs, although the heirs will not be asked to pay off any deficiency that may remain after the home has been sold.
- There is no restriction on how the income received from the reverse mortgage can be used. But if there is an outstanding mortgage on the home, the mortgage has higher priority than other uses the borrower may wish to put the income into.
- The proceeds you can get from a reverse mortgage loan are limited to $625,500. If you have financial needs higher than the amount, a reverse mortgage is not suitable.
Meanwhile, before selecting a lender to obtain a reverse mortgage from, ensure to read reviews about it. Various lenders are offering reverse mortgages; however, people have diverse experience with them.
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