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Is A Reverse Mortgage Right For You?
from:A reverse mortgage is the exact opposite of a traditional mortgage. Instead of you paying the bank to live in the house, the bank pays you to live in it. This may seem a bad deal for the bank, but there are a lot of reasons why a bank will allow a reverse mortgage. Typically a reverse mortgage is only approved for someone 62 or more years of age that has paid off his or her original mortgage. With all that equity in the home, the senior sitting in it might want to stay in the home but face additional expenses in medical or living costs that they can’t cover. Instead of selling the home and downsizing, they may choose to do a reverse mortgage with a bank instead thus allowing them to remain in the home.
How It Works
The reverse mortgage is a little more complex to close than a traditional mortgage. There are a number of different rules surrounding this type of mortgage loan. The age limit is one barrier and also the condition of the home may be another. The home has to be in good condition, free of major faults, before the bank considers doing this type of mortgage. Closing costs are significantly higher than the traditional loans and fees can also eat into equity. However, the upside is that you can get a disbursement of cash to help you pay immediate expenses while not having to vacate your home. This cash can come as a lump sum, a monthly payment, or even a credit line. The terms of the loan may differ with the bank involved and you should check to see what happens if you eventually sell the home instead of staying in it until you die.
The Potential Negatives
Seniors are targeted by unscrupulous lenders with predatory lending practices that can include a high fee reverse mortgage. Most lenders will be asked to undergo counseling before they take out a reverse mortgage, but that might not be enough to assess whether the mortgage is what you need at this point in your life. As always, if you aren’t certain of what you are signing, don’t sign. Instead, try to review the documents with someone who is knowledgeable and can answer any questions you might have about this type of mortgage. There are some downsides to a reverse mortgage. They can impact your ability to receive Medicaid benefits and government financial assistance. So, be sure to not only look at the terms of the mortgage but also check with your local government offices to see if the mortgage product might actually reduce your income instead of increasing it, due to the offset of benefits.
Mortgage Crisis News
Mortgage crisis worsens, new bank figures show - Irish Times
 BBC News | Mortgage crisis worsens, new bank figures show Irish Times The mortgage arrears crisis is deepening as new Central Bank figures show there were nearly 78000 mortgages in arrears of 90 days or more at the end of March in an increase of nearly 8000 over just three months. The Central Bank said 77630 - or 10.2 ... Banks 'set to propose schemes to tackle mortgage crisis' New schemes to be introduced to alleviate mortgage crisis Banks and developers bailed out, so should struggling mortgage holders |
Mortgage Crisis Redux: One-Third of Bay Area Mortgages Underwater - KQED
 Go Banking Rates | Mortgage Crisis Redux: One-Third of Bay Area Mortgages Underwater KQED by Peter Jon Shuler | May 24, 2012 — 1:24 PM Wells Fargo employees help homeowners go over paperwork during a free workshop for customers who are facing mortgage payment challenges. Despite a stabilizing housing market, 30.7 percent of Bay Area ... Underwater homeowners owe $1.2 trillion more than homes' worth 31 Percent of Homeowners Strapped with an Underwater Mortgage |
DOJ receives rare praise in financial crisis cases - Chicago Tribune
DOJ receives rare praise in financial crisis cases Chicago Tribune In April, for example, it sued GFI Mortgage Bankers Inc on such grounds for loan activity from 2005 through 2009. In December, the Justice Department reached a record $335 million settlement with failed mortgage lender Countrywide Financial Corp, ... |
Kenny says mortgage crisis biggest issue facing Ireland - Irish Times
 Irish Times | Kenny says mortgage crisis biggest issue facing Ireland Irish Times Taoiseach Enda Kenny: said the Government had taken a number of steps to deal with the mortgage crisis. Photograph: Aidan Crawley/Bloomberg Mortgage arrears is the single biggest issue currently facing Irish people, Taoiseach Enda Kenny has said. 'More urgency' demanded over mortgages crisis Govt failed to deal with mortgage crisis - Micheál Martin Taoiseach: Mortgage arrears biggest issue facing country |
Arizonans sue to block mortgage fund raid - Yuma Sun
 Arizona Capitol Times | Arizonans sue to block mortgage fund raid Yuma Sun “And the position of the state is that, due to the recession that resulted from the mortgage crisis, they've lost 30 percent of their revenues, which is billion of dollars. Fifty million is a tiny fraction of what they've lost. Should States Be Chided for How They Use Their Mortgage Settlement Money? Billion Dollar Bait & Switch: States Divert Foreclosure Deal Funds Allocation of Mortgage Settlement Funds |