How Safe Is A Reverse Mortgage?
Have You Considered Using Your Home as a Source of Additional Retirement Income, How Safe Is A Reverse Mortgage? Is This Option Right for You?
There is a program that is available for elderly people that allows them to use their home as a source of additional income; this program is known as a reverse mortgage. A reverse mortgage allows homeowners to receive money from a lender as the lender makes payments to the homeowner. As the name implies it works the opposite of a regular mortgage, instead of paying mortgage payments, they receive payments. The question that some may pose is how safe is a reverse mortgage.
Exactly How Safe is a Reverse Mortgage.
Reverse mortgages are overseen by many federal agencies to insure that consumers are not taken advantage of by an unscrupulous lender. There are laws in place to protect homeowners who enter into this type of financial contract, laws that require consumers to receive counseling from independent counselors so that they have a good understanding of a reverse mortgage. In addition to requiring counseling, lenders issuing reverse mortgages have to provide full disclosure upfront of all the cost associated with a reverse mortgage.
Features of a Reverse Mortgage
A reverse mortgage has some attractive features for seniors who want to tap into the equity of their home. One of the features that can relieve some of the worries of someone who is wondering how safe is a reverse mortgage is the fact that recipients of a reverse mortgage get to stay in their home as long as they live. This means that seniors receiving a reverse mortgage receive money for their home and at the same time have a place to live for life. Another attractive feature of a reverse mortgage is that the repayment of the loan will never exceed the value of the home as long as the home is sold to repay the loan; if someone wants to retain the home, they will have to pay the total amount borrowed plus any accrued interest.
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