Understanding Reverse Mortgages

Our Coto De Caza Real Estate Agents say that some reverse mortgages are good, some are bad. Nonetheless, our Coto De Caza Real Estate Agents suggest you read the paperwork prior to signing on the dotted line. This goes doubly if your parents are thinking about a reverse mortgage and you’re going to be aiding them in dealing with their finances as they get older.

Reverse Mortgages and Their Bad Reputation

Our Coto De Caza Real Estate Agents say that when reverse mortgages were first becoming HOT in demand, banks willing to make the loans proliferated. And so did con artists who took advantage of an aging population created of individuals who were often desperate to hold on to their homes or simply were medically incapable of understanding the consequences of the monthly payment they’d receive. This was good for no one but the scammers.

That’s why a handful of legislation has been written to remedy these kinds of situations. Now, if you or your parents are worried that a reverse mortgage offer might be a scam, you can opt for an FHA reverse mortgage. It’s easy to verify that an FHA lender is legit, where it may be less clear if certain brokers are on the up and up. You may get a better deal with a non-FHA reverse mortgage, but they provide confidence that you’re on the right path and that’s worth something, too.

How Exactly Do Reverse Mortgages Work?

Our Coto De Caza Realtors say that reverse mortgages are designed to aid individuals who are retirement age afford to stay in their homes longer. Generally, this means that mortgage payments stop and there might even be some form of payment to the homeowner.

Say for example, if your grandmother shows up to the next family gathering in a brand new convertible roadster, it might be a good idea to ask her about the terms of her reverse mortgage. Some are genuinely helpful and decent; others are not so much.

The decent part is that reverse mortgages are now heavily regulated by the government, so it’s much harder for scammers to take advantage of older people who may be having money problems already.

They don’t require a credit pull or even decent credit. You just need a home that’s free and clear, or has a significant amount of equity, and be 62 or older. You’ll pay some fees upfront and be required to complete HUD-approved counseling (you will pay a fee for this, too) that will help you determine if you’re really a good fit for a reverse mortgage.

Furthermore, our Coto De Caza Realtors say that if you happen to die while you still own the house, your heirs have the option to redeem it from the reverse mortgage lender by paying off the borrowed amount in full. Usually this is achieved with another “forward” mortgage.

Reverse Mortgage Payment Solutions

One of the best things about a reverse mortgage is the money that comes back into the pocket of the borrower. Our Coto De Caza Real Estate Agents sat that you or your parents can choose how that money is distributed, too.

Essentially, you have three options: taking a lump sum, taking a monthly payment or using it as a line of credit. There are also ways to mix and match these, so you might take a percentage as a lump sum for that flashy convertible and the rest as a line of credit to use as you need to fill up on gas.

A majority of Coto De Caza Realtors will tell you that for a lot of seniors, a reverse mortgage will allow them to age in place without fear of losing their home (provided they keep up with the taxes and insurance).

This can be an incredible option as long as the source of the funds is fully vetted, all the paperwork is in order and read from top to bottom and they have a plan to make the money last as long as possible.

Looking for a Reverse Mortgage Lender? Look no further!

In addition, Coto De Caza Real Estate Agents say HomeKeepr is known to have a variety of different types of home pros, including lenders that provide reverse mortgages.

Since your Coto De Caza Realtor has already suggested the top pros in the area, you’ll know at a glance who is going to treat you or your parents with respect and ensure that their interests are put above everything else.

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