The new "housing" bill has a few interesting things to say about Reverse Mortgages.
These are "mortgages" where the lender pays you while you stay in the house. For many people that's the only way that they can maintain their property as living on a fixed income (social security and perhaps a pension) just doesn't cover the inflationary rise of medicines, utilities and food.
One of my clients, took a reverse mortgage when she turned 62...and that made her life good.
However, there are some drawbacks...high closing costs and a limited amount of money that you can withdraw. So, if you want to do this...investigate and compare your options.
The new bill attempts to limit the fees, as its loan origination fee is set at 2 per cent of any loan under $200,000. Higher loans will have a fee of 1 per cent up to a maximum of $6000. Should make these loan much more appealing to seniors.
The other thing the bill will attempt is to control the high-pressure sales people who insist that you buy an insurance product as a condition for getting the loan. Don't fall for it. Take your kids, grandkids or borrow somebody who is a logical thinker and let them ask the questions while you digest the information.
Many seniors are afraid to ask questions, especially, if they don't understand something. Should I ever need to do this, I'm taking my teacher-daughter who will look cooly at the sales person and challenge them as to why.
It's so nice to know that I have logical kids who don't accept what someone says. I'm sure it's going to save me time and money.
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