Reverse Mortgage Cons
There are several reasons why any senior should think deeply before obtaining a reverse mortgage. Before considering a reverse mortgage as the last tool to guarantee financial security, it is essential to consider several factors.
Reverse Mortgage Cons
- The applicant must not be less than 62 years old to qualify.
- The applicant must pay for and attend a mandatory mortgage counseling.
- The applicant may be required to pay monthly servicing fees during the term of the reverse mortgage.
- The associated fees- origination fees and closing cost are expensive.
- The interest rate on most reverse mortgages are variable and are dependent on the current market dictates.
- The total debt rises and the interest is added to the loan balance.
- The interest cannot be deducted until the loan is paid off.
- The borrower can be asked for loan repayment as a result of failure to pay property taxes and insurance, stay in the home for 12 consecutive months, or maintain the home.
- The equity in the home gets used up leaving the borrower and the heirs with fewer or no assets.
- The size of mortgage an applicant can get is limited as well as how much can be borrowed in the first year.
- The borrower must pay property taxes and insurance.
- Reverse mortgages affect Supplemental Security Income (SSI) because a person that will qualify for SSI cannot receive more than $600 monthly income.
Find out more about Reverse Mortgage Cons.
REVIEWS5(based on 1 reviews)
Looks like you put a lot of work in here. Great information and very helpfull Brandon 07/26/2016
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The services referred to herein are not available to persons located outside the state of California.
Borrower is responsible for property taxes, homeowners insurance, and property maintenance. A HECM is a home-secured debt payable upon default or a maturity event. Some restrictions apply. This material has not been reviewed, approved, or issued by HUD, FHA, or any government agency.