Article Sphere Logo

Benefits and Disadvantages of a Reverse Mortgage

By Expert Author: Ronnica Rothe | Article Abstract
Word Count: 387 words | Views: 91 view(s)
If you are considering a reverse mortgage (also called a home equity conversion mortgage), there are several factors you should consider. There are both advantages and disadvantages to this type of mortgage which is certainly not meant for everyone.

A reverse mortgage is only for those who have already invested in their home by paying their mortgage through the years or having received full ownership of the home by other means. It allows the bank or reverse mortgage company to pay you mortgage payments, slowly gaining financial ownership of the house. This is all done while you are allowed to remain in the house.

One of the obvious benefits of a reverse mortgage is that it allows you to access the money you have put into your house without having to leave your house behind. This money can be used to maintain the household or provide for extra income to live the life you want.

Because you are remaining in a home that is becoming less and less yours, there are higher fees associated with this type of loan than others. There are also restrictions on how much equity you can receive, so that this is not an unlimited source of income.

The size of the payments you can receive each month is based on how long you wish to receive them. The smaller the payments you receive, the greater the number of years that you can receive these reverse mortgage payments.

If you are considering a reverse mortgage, know that your heir will have to pay off that loan in order to receive the house. Otherwise, the house will be sold and your heir will receive the balance of the house's value after the appropriate money is given to the lender. If the house itself is an important family asset, you may be limited the potential that someone in your family will be able to retain it, as they must qualify and be able to afford to make the loan payments to keep the house.

To sort out the benefits and disadvantages of a reverse mortgage for your situation, it is best to talk to a HUD-approved reverse mortgage counselor. This type of counselor is well versed in the reverse mortgage process and will be able to apply their knowledge to your situation.
Ronnica Rothe

About the Author/Author Bio

The Benefits and Disadvantages of a Reverse Mortgage
Credit and Debt Blog

Ronnica Rothe is a graduate with honors from the University of Oklahoma and a current student at Southeastern Baptist Theological Seminary. She works with stopccdebt.com to help individuals get out of debt and reach their financial goals.

Article Source: http://www.articlesphere.com/Article/Benefits-and-Disadvantages-of-a-Reverse-Mortgage/110244

Article Submitted: 2007-10-29 | This Article has been viewed 91 times.

Rate Article

Related Videos

A Reverse Mortgage
Learn about Mortgage Rates and Points
Home Loan Mortgage Choices for your Next Home
How to Lock Your Mortgage Rate Before Lender Hikes It
Your Mortgage Decision And Discipline
 

More "Mortgages Refinance" Related Articles

 
 

Listed below are more articles related to the above article from the "Mortgages Refinance" article category.

People interested in the above article "Benefits and Disadvantages of a Reverse Mortgage" are also interested in the related articles listed below:

 
The global financial crisis has left lots of borrowers out of luck when it comes to buying the commercial property that they need or want. As many as eighty percent fewer commercial property loans are now being written than than before. If you have been rejected by a lender and are looking for an alternative funding source to buy your commercial property, you should consider a private commercial mortgage lender.
If your past mistakes led you to foreclosure, you probably feel like the weight of the world is on your shoulders and that you may never qualify for a home mortgage again. The truth is that obtaining a home loan post foreclosure requires a bit of legwork, but can be accomplished. Thousands of current homeowners have been through a foreclosure before.
"Blessed are the young," says Herbert Hoover, "for they shall inherit the national debt." Debt, in whatever language or guise, is bad. But what if you've incurred debts and find it hard to dig yourself out of them? Does this mean you are forever disqualified from owning a home? Some would say yes. Bad credit loan mortgage rates show otherwise.
With the government now putting policies in place to stimulate the housing market, this could be a great time for potential home buyers to find the home they have been looking for. A mortgage broker can be a good choice in helping these buyers find the mortgage they seek.
You decide it's time to go shopping for a home mortgage. The instant this decision is made, a feeling of dread washes over you. The same old questions thump inside your brain. How do I compare home loan interest rates? How will I know a fair rate when I see one? The where, what, how and why of home financing will have you so mind boggled you will soon be tearing your hair out in despair.
With the commercial real estate market about to go into a crisis that may actually even be worse than the one experienced by the housing sector, it is easy to figure out the reasons why the bank regulators have urged the lenders to enhance their efforts in finding ways to approve a commercial mortgage modification for their property owners on the brink of foreclosure. The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and other financial regulators are worried that the stability of the financial institutions could easily crumble with the onset of the upcoming wave of defaults by commercial property borrowers.
Financial analysts have been predicting that the commercial property sector will also undergo a crisis that might even be worse than the collapse experienced in the residential housing market. The increasing number of vacancies in commercial properties and the unchecked increase in the unemployment rate are harbingers of potential serious problems in this particular market.
 
Article Directory Home All Categories Finance Mortgages Refinance
 

Can't find what you're looking for? Try Google Search!
 
Copyright © 2005 - by Larry Lim, Singapore - Article Search Engine Directory at ArticleSphere.com™
All Rights Reserved Worldwide. All Trademarks and Servicemarks are the property of the respective owners.

Afrikaans Albanian Arabic Belarusian Bulgarian Catalan Chinese (Simplified) Chinese (Traditional) Croatian Czech Danish German English Estonian Filipino Finnish French Galician Greek Hebrew Hindi Hungarian Icelandic Indonesian Irish Italiano Japanese Korean Latvian Lithuanian Macedonian Malay Maltese Dutch Norwegian Persian Polish Portuguese Romanian Russian Serbian Slovak Slovenian Spanish Swahili Swedish Thai Turkish Ukrainian Vietnamese Welsh Yiddish