Don’t get ripped off. Read this essential info about Reverse Mortgages before you buy. Are reverse mortgages a sound investment strategy for you?
Many seniors are bombarded with financial advice for their retirement. Reverse Mortgages are on of the choices for retirees who own their own home, but is a reverse mortgage the best option for making use of equity? The answer depends on each individuals circumstance, but here is a quick rundown of the major things to take into account before making a decision:
Reasons to buy a reverse mortgage
The primary advantage to seniors is the ability to take equity out in a lump sum, or monthly payments, while staying in their own home with no monthly mortgage or rent to pay. If the fees are reasonable and the company reputable, this is a way to pull cash out of a home without having to pay interest on a loan, and will allow them to stay in their home for the rest of their lives.
Reasons not to buy a reverse mortgage
If there is illness or injury that a move to assisted living, or they just want to move somewhere else, they no longer have the option of selling the home or borrowing against the equity because the equity has already been pulled out, and the home belongs to the bank.
The fees can be very difficult to understand, and it is hard for most people to be able to compare the relative values of different reverse mortgage offers. There have been reports of dishonest sales people steering seniors to poor value products to get great commissions for themselves, and most people do not know how to evaluate these complex products.
Reverse mortgages ensure that there is no equity left in the home to pass on to loved ones. Many seniors want to pass their home to their family and a reverse mortgage does not allow this option.
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