People are worried, in these times of economic uncertainty. The housing crisis has made many people worried about losing their homes. News reports of unethical lending practices have scared many away from trusting mortgage companies. The market most at risk is the senior citizens. Targeted by scam artists, this segment of consumers were taken advantage of. When reverse mortgages came into existence, people were reluctant to believe the hype.
Reverse Mortgage Investigation
The Federal Government has looked into claims about reverse mortgage company practices. With the concern of the lending policies of other mortgage products, there has been a thorough investigation done to determine the safety of these loan types. The Federal Government found no grounds to determine that these practices were unethical or high risk to the homeowners.
So What is a Reverse Mortgage?
Reverse mortgages are simply just like Fairway Mortgage, it is a mortgage where the equity in the home is paid out to the homeowner in one lump sum, or in payments. They are only available to homeowners 62 years of age or older with equity in their home. The debt is not due to be paid until the owner dies, moves out for a prolonged time, or sells the house. The bank does not own the house, the homeowner still maintains his property.
Do Reverse Mortgages Really Work?
Simply put, Yes! They are an excellent way for elderly homeowners to tap into the equity of their home, without having to sell their property. This provides a line of income that does not interfere with government assistance that they may be receiving. Since the house is still owned by the homeowners, they can continue to live there without having to worry. If the home value goes up, you can even take more equity out of the home. If the house value drops, the amount of money will not go down, the lender must take these risks, up to a certain degree.
Reverse mortgages are a new lending product that have been fully investigated and well thought out. They offer the benefits of tapping equity, providing income, and home ownership. Few mortgage products offer anything similar. With such low risks, reverse mortgages are a sound decision, and definitely on the up and up.