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Home Equity Loan Reverse Mortgages-The
Dark Side!
Reverse Mortgages are quickly becoming
the talk of the lending industry, one of the fastest growing and
most popular products out there are for some good reasons. Why you
ask?
1.LENDER PROFIT Lenders make great money on these loans. They
are more costly to the consumer than a regular mortgage.
2. MINIMAL RISK Risk to the lenders is minimal. After all
they are secured by the borrower's house.
3.THE MARKET Over 72 million customers will become eligible
for the product in the next 5-10 years as baby boomers turn 62-a
huge market!
There are several points that borrowers need to be up to speed on.
You've seen that lenders want you to get a reverse mortgage for the
points made above. Borrowers need to consider many things as well.
1.CONSIDER ALTERNATIVE LOANS Reverse mortgages can be an
expensive way to borrow money. Get free counseling.
2. CONSIDER PUBLIC BENEFITS Even though the proceeds are tax
free they may impact on your eligibility for certain need based
public benefits such as Medicaid and Supplemental Social Security
Benefits. Get free counseling.
3. CONFUSING OPTIONS There are many options available with
reverse mortgages. Get free counseling.
4. SHOP AND COMPARE Like anything you want to buy that is a
big ticket item you really need to shop and compare costs and
benefits from the myriad of lenders out there. Get free counseling.
The real gist of my concern here is just an observation. You have
two key ingredients that traditionally have made for abuse in other
areas. They are in play here so there is potential for abuse.
1. LOTS OF MONEY Money unfortunately acts like a magnet when
it comes to abuse. There are very few motivating factors in the
world that surpass money. And there is lots of money in the mortgage
market. Get free counseling.
2. AGE DEMOGRAPHICS Senior citizens for years have been the
target of many an unscrupulous scam artist. That is the market for
reverse mortgages-senior citizens. Get free counseling.
There are many great points to getting a reverse mortgage. As a
consumer you need to have your eyes open and do more due diligence
than normal. And did I mention there is FREE COUNSELING available thru HUD approved counselors.
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