The Reverse Mortgage and Worst Case Scenario
People are really pretty trusting. As a reverse mortgage loan officer people actually ask me if the reverse mortgage is a good choice.
The truth is the reverse mortgage is not a great decision for all borrowers. Situations are unique and they must be evaluated individually.
I have a few borrowers with a bunch of money in savings but the majority have next to nothing and are looking for financial answers.
Some have low fixed incomes and others still have jobs.
One of my big concerns for these folks is they will have the money available later on in the just in case scenario of a huge financial issue.
As we get older big medical needs are more likely, not less. As mature adults we must be prepared.
One of the problems of getting a reverse mortgage is all of the sudden an individual who is used to living on nothing has tons of money to spend. I caution to use discipline with the reverse.
The reason being is the house is going to be the biggest store of cash for any of these individuals. If that is floundered away they could be in a real bind later on when something big comes along.
For a very conservative perspective one should use the reverse mortgage when it is absolutely needed. If a mortgage exists maybe it is best to wait to refinance it with a reverse mortgage.
For those without mortgages who want to use the reverse as supplemental income I advise using the line of credit option. This option allows the borrower to take out money as needed and interest only accrues on used moneys.
A real benefit of this LOC is it actually grows over time and benefits the borrowers. Any unused money in the LOC gains interest for the borrowers favor.
There is no doubt the reverse mortgage serves a great financial purpose. However, it should be used with the utmost care.
The truth is the reverse mortgage is not a great decision for all borrowers. Situations are unique and they must be evaluated individually.
I have a few borrowers with a bunch of money in savings but the majority have next to nothing and are looking for financial answers.
Some have low fixed incomes and others still have jobs.
One of my big concerns for these folks is they will have the money available later on in the just in case scenario of a huge financial issue.
As we get older big medical needs are more likely, not less. As mature adults we must be prepared.
One of the problems of getting a reverse mortgage is all of the sudden an individual who is used to living on nothing has tons of money to spend. I caution to use discipline with the reverse.
The reason being is the house is going to be the biggest store of cash for any of these individuals. If that is floundered away they could be in a real bind later on when something big comes along.
For a very conservative perspective one should use the reverse mortgage when it is absolutely needed. If a mortgage exists maybe it is best to wait to refinance it with a reverse mortgage.
For those without mortgages who want to use the reverse as supplemental income I advise using the line of credit option. This option allows the borrower to take out money as needed and interest only accrues on used moneys.
A real benefit of this LOC is it actually grows over time and benefits the borrowers. Any unused money in the LOC gains interest for the borrowers favor.
There is no doubt the reverse mortgage serves a great financial purpose. However, it should be used with the utmost care.
About the Author:
Live in Texas.. learn about the HECM right here. Also, this site is a great q&a abouth the HECM in Texasright here.
posted by Debt Consolidation Loan at
5:08 AM
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