Pitfalls Of A Reverse Mortgage: Learn How To Minimize Them
Posted on July 13, 2008
Filed Under Mortgage Smarts |
Since reverse mortgages work different than a traditional mortgage, you need to be aware of the major pitfalls of a reverse mortgage. Learning about these problems in advance can save you thousands of dollars over the life of the loan.
First, you need to understand that no all reverse home mortgages. Prior to applying for a reverse mortgage, you need to make sure that you are choosing the right one. The two main kinds are the private reverse mortgage and the FHA insured reverse mortgage.
With a private reverse mortgage, there are basically no restrictions on how much you can be charged. Whenever you hear of horror stories of homeowners who got a reverse mortgage and ended up paying way too much is because they chose this type of mortgage. Keep away from this mortgage.
With a FHA insured reverse mortgage, there are plenty of regulations that lenders must comply with. FHA regulates this type of reverse mortgage and sets the fees that lenders may charge you. Of course, you always want to choose this type of reverse mortgage.
In addition, with a FHA insured reverse mortgage, you have the right to a free consulting session. During this session, you may ask any questions you have. Write all your questions ahead of time so that you do not forget later on. Take full advantage of this session.
Another one of the pitfalls of a reverse mortgage is when a lender is too excited for you to apply a reverse mortgage in order to pay for something else: a second home, an investment, etc. Normally, be aware of lenders who seem to be too excited about you applying for the mortgage.
Moreover, keep in mind than although you won’t have to make any [spin}recurring|monthly[/spin] payments, you are nevertheless accountable for the typical fees associated with the title of a home: taxes, maintenance, insurance, etc.
You may want to use some of the funds you get from the reverse mortgage to pay for these fees. This way, you can be sure that you will stay in your home for as long as you want.
In addition, a reverse mortgage may not be the most inexpensive answer for you. You may consider to refinance or to sell the home. Naturally, a reverse mortgage may be the best solution for you if you want to stay in your home and do not want to make any recurring payments or if you need a consistent “second income.”
In conclusion, always use a FHA approved reverse mortgage lender. In addition, keep sufficient cash to pay for the maintenance costs and make sure that a reverse mortgage is the most inexpensive or more appropriate answer for you. In this way, you can be sure to reduce the pitfalls of a reverse mortgage.
del.icio.us Digg Reddit Google StumbleUpon Technorati Yahoo!
Comments
Leave a Comment
If you would like to make a comment, please fill out the form below.
LAUGH at GAS PRICES!
Find out how you can drive around using WATER AS FUEL and Ignore Rising Gas Prices
Click Here to Learn More!
STOP PAYING for Electricity!
Let The Power Company Pay You by Creating Your Own Renewable Energy
Click Here to Find Out How!
Categories
- A to Z
- Choices
- Credit Cards
- Diving
- Economy
- Faith
- Healthy Living
- Humor
- Inspiration
- Lifestyle
- Mortgage Smarts
- Personal Finances
- Quit Smoking
- Retirement
- Saving Money
- Technology
- Travel
- Uncategorized
Recently
- Energy Savings
- For Your Next Vacation Try Puerto Vallarta
- Lasik Risk - Truth About Lasik Risk
- 7 Mortgage Recommendations For The First Time Home Buyer
- Practical Guide to Handling Retirement Tactics
- Most Beautiful Beaches
- Save Money To Help Our Economy!
- Athens Of Mediterranean: Dubrovnik Map
- Finding Fundraising Ideas: Top Guide
- Do It Yourself - Most Common Watch Repairs
- Ways To Make Over Your Metabolism
- Find The Best Insurers For German Riester Insurances
- Florida Nursing Home Abuse Lawsuits Increasing Thanks To Aggressive Lawyers
- Can’t Think Of A Unique Baby Shower Present?
- Are Discounted Contact Lens The Best Option