Another Cautionary Tale of Reverse Mortgages

Local banks and mortgage companies are pushing a unique mortgage loan that sounds more like you just won the lottery.

Instead of making monthly payments, you receive monthly payments and you don’t have to pay it back until you sell you home. It’s called a reverse mortgage.

But proceed with caution.

Reverse mortgages have been around for some time, but they’re being heavily market right now, in part because of all the long-time homeowners who are sitting on a gold mine in equity.
The loans are marketed to homeowners who may have limited income, but a wealth of equity in their homes. You must be at least 62 years old.

Here’s how it works.

Say you have $100,000 in equity in your home.

You can take out $50,000 - or any amount you choose - and pay nothing back for as long as you live in the house.

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Written by charles dennis on September 6th, 2007 with comments disabled.
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