Think Twice About Reverse Mortgages
We encourage every senior citizen who is considering a Reverse
Mortgage to seriously study their respective situation and decide, with
a person who has no financial interest in the outcome, whether or not a
Reverse Mortgage is the right mortgage to sign up for. Below are
some cases provided by a senior advocate that really need to be reviewed
before a decision is made.
CASE 1
Husband and wife. Husband 75, wife 58. Wife supports husband. Wife had a
stroke. They fell behind in their condo mortgage payments for three
months while she was incapacitated. They opted for a reverse mortgage.
Since she wasn't 62, her name had to be removed from title. She was
counseled about that while still suffering from the affects of the
stroke. They needed $4,000 to stop the foreclosure. Six months later,
they owed $16,000, her mind was clearer, her husband's health is now
failing, and she is facing losing her home because she's not on title,
she can't repay the $16,000 (which grows at a rate of $550 a month).
CASE 2:
An elderly couple borrowed against their "free and clear" home through a
reverse mortgage. They took a one-time cash-out. They used the money to
invest in the stock market (pre-dot.com-crash). The money was lost. A
few years later the husband died. A few years later their son stepped in
to help his mother with her finances. He found the reverse mortgage
documents. The mother explained everything. The son began actions to pay
off the reverse mortgage. The son was shocked to find out that 75%
percent had been added to the principle loan amount.
CASE 3:
A senior-aged couple, both still working, wanted to augment their income
in order for the wife to retire. They owe $16,000 on their home. The
home's value is between $350,000 and $400,000. They were considering a
reverse mortgage, used as a line of credit, to achieve their goal. When
presented with other options, such as selling their home, investing the
proceeds, and drawing upon the proceeds to live in a senior facility,
they realized that their future with declining abilities, could be more
pleasant than if they stayed in their home. A reverse mortgage consumes
equity and must be paid in full when the home is sold. Investing the
proceeds from the sale of their home will increase their reserves which
will offset the expense of senior facility living expenses. No one in
the reverse mortgage industry can offer any other solutions to them.
CASE 4:
A couple just a few years beyond the minimum age limit of 62 opted for a
reverse mortgage which is structured as a credit line. The debt on their
home was about $60,000. The home can be encumbered by only one loan,
which would be the new Reverse Mortgage. The mortgage debt of $60,000
was added into the reverse mortgage. The debt plus the front-end fees
skyrocketed the total debt to an amount of $74,000. They willingly, even
with the mandatory counseling, agreed to the addition of $14,000 of debt
to their home, all of that as loan fees, in order to support a
life-style choice. Could they have supported the same lifestyle with
their income? It is worth looking into before you sign.
Chris Plante
2901 West Coast
Highway, Suite 200
Newport Beach,
CA 92663
(800) 698-6014
Fax
(866) 567-1938
Email:
MyDiscount@ReverseMortgageDiscounters.com
