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Are Reverse Mortgages Worth the Hype?

Are Reverse Mortgages Worth the Hype?

Some end of the week thoughts on reverse mortgages; are they worth the hype? Reverse mortgages may seem great from a bird’s eye view. You see them and think, “Wow, no more payments for the rest of my life and money coming out to help pay for my expenses. I don’t even have to particularly qualify other than showing that I can pay for the annual taxes and insurance! What a great deal!” Unfortunately those promises are misleading. The problem lies within the fact that the loans only go up to a 40% of loan to value. Most of us have a loan close to that. The rate is 4% higher than conventional rates which actually may eat up your equity twice as fast.    A more practical alternative is to simply get an equity loan on your house that goes up to 90%. You can write yourself a monthly check and this will last much longer because of the higher loan to value that is available to you. Furthermore, there is no upfront costs to the equity loan option  (other than 3rd party costs such as title insurance). Brokers that sell reverse mortgages typically target senior citizens and they are getting rich doing so due to the many upfront costs. The typical rates for an equity line is about 3.75% and the interest rate on a reverse mortgage is about 7.5%. In my personal opinion, the only way one should take a reverse mortgage is if one they are in desperate need of monthly income, they have plenty of equity, cannot qualify for some type of conventional financing...

Top Real Estate Articles of the Week!

Richard Maize,Investment,Professional,Banker,Philanthropist,businessman,finance,financial,trustworthy,entrepreneur,adviser,sustainable,fund,real estate A lot of changes have occurred this week in finance and real estate! So to keep you up to date here are my top picks for articles of the week! Los Angeles real estate continues to be on the rise, but how long can it last? The Hamptons sees a real estate slow down  The 20 hottest U.S. markets for real estate investing in 2017 Which countries have the highest and lowest taxes on residential real estate? Harry Macklowe on New York real estate There you have it! Be sure to check back next week for more updates! I do the hard work so you don’t have to....