It's difficult to turn on the television these days without seeing a slew of commercials for reverse mortgages. They feature past-their-prime celebrities such as henry winkler and fred thompson, extolling the benefits of "guaranteed tax-free income" for those 62 and over. What they don't tell you is that reverse mortgages can be dangerous and can put your biggest asset - your home - at risk. A reverse mortgage really a misnomer. It is really nothing more than a regular mortgage, except that the loan proceeds are paid out to you in installments, rather than all at once. These plans mortgage the existing equity in your home, bleeding it down while it accrues interest on the growing debt. This mortgage does not have to be repaid until you either sell the home or die. Then the loan balance, interest and accrued fees are extracted from the sale proceeds. This type of loan can be beneficial in a very limited set of circumstances, such as allowing a senior to remain in his or her home, rather than having to sell it to pay for medical or other unexpected expenses. In many circumstances, however, a reverse mortgage can be a risk to your financial security. Here are six dangers you should consider before signing on the bottom line. 1-complexity 2-pressure 3-future health 4-eligibility for government programs 5-high fees 6-spousal eviction Reverse mortgages can be an important source of emergency funds for some seniors who would otherwise have to sell their homes to access their equity. There are several dangers to these plans, however, that can put your home at risk and sap your asset base.
Exactly Hanif it works as you have told us, nice point raised. People should have to know about this as it is the most disastrous mortgage.
In the end you are left with nothing is its future. So be careful about this think twice before signing anything like this.
Thanks Hanif for showing your interest here for the welfare of the people.