Tuesday, November 20, 2007

The Changing Face of Reverse Mortgages

Reverse mortgages are becoming more common and varied, if not more simple. As this article points out, more and more retirees are taking reverse mortgages not out of desperation, but out of a desire to spend their last years enjoying the money they've worked so hard to save.

“Jumbo” reverse mortgages — for houses valued at as much as $ 10 million — are becoming more common.

Even though the new variety of reverse mortgage products creates confusion and the necessity of education for the consumer, there's also potential to reduce the cost of what has traditionally been a very expensive mortgage. As with all mortgages, lower rates mean higher fees and vice versa.

But a customer may pay higher interest rates in exchange for lower fees, said David Certner, legislative-policy director at AARP, the Washington-based advocacy group.

Not "may" David, will. Banks have to make money if they're going to be able to continue loaning it -- they either make their money from interest or from fees, no exceptions. It's important for customers to consider their longterm objectives when deciding which way is best for them to pay for a loan.

Use this calculator to see if a reverse mortgage can help you enjoy your golden years.

Sphere: Related Content


SEO London said...

You’ve got a nice thing to talk about. Hope your post will be read by many.

Cheap SEO said...

I go to your website once in a while and I just have to mention that I like your information. Thanks a lot.