Reverse mortgages pros and cons.
A Reverse Mortgage can be very useful if you are over 62 years of age. At closing, the lender will offer seniors a lump sum of cash or will pay to the homeowner a monthly amount based on the value and equity in the home. This amount will be paid for life and does not have to be repaid until the home is sold therefore the older the senior is, the higher the paid out dollar amount. The Reverse Mortgage does have an interest rate which accumulates until it is paid off at the time of sale. It also has related closing costs such as appraisal, title, escrow, etc. which are added to the loan amount at the time of closing if a senior is living on a limited income and wants to eliminate a mortgage payment to have more income it may be desirable. However, a reverse mortgage is not for everyone. The property owner still has to pay property taxes and insurance each year. Also, closing costs are higher then a conventional loan and the interest rates charged are also higher. Cost-Effective Loans can answer all your questions and go over all costs with you. Call to find out if a Reverse Mortgage can meet your needs or if a conventional mortgage would be a better choice?
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