Reverse Mortgages Aren’t a Great Deal

By
Real Estate Sales Representative with DIR-USA.com

We Buy Houses Cash - Vienna VA: Recent advertisements are everywhere you look. They offer reverse mortgages for seniors that have their home paid off or nearly paid off. With retirement accounts being depleted and more seniors entering the retirement phase, it might seem tempting.

Reverse Mortgages Aren’t a Great DealA reverse mortgage is explained as a way to start collecting on the equity in your home before you sell and leave the home. You would essentially receive a check every month against the equity you have built up. You can use the check to live on as part of your retirement income.

Estate planning companies have been making thousands of dollars per case on information and consultations with potential clients. The trouble is that HUD has the same information available to you for free. Some of the less honorable reverse mortgage planners are charging from 6 to 10 percent of what the seniors borrow against their equity. There has recently been an order issued by HUD to let lenders know that they should not do business with reverse mortgage companies that are charging these fees.

One of the selling points of less than honorable estate planners is to push the reverse mortgage as a vehicle to pay for annuities or other insurance plans. The planners then take a fee which is added to the price of the insurance products and reducing the clients equity.The terms are also suspect as they often hide fees and unethical terms into the contracts. Items such as shared equity and shared appreciation go to the planner when the house is sold in the future. This can be very expensive and cost the homeowner tens of thousands of dollars, again eating up the equity that’s left.

A better option might be to sell the house to a real estate investor. They buy houses in any condition and can get the deal done in a week or even less, especially where there are no liens or encumbrances on the house. Selling to an investor will get you about 70 to 80% of the house’s current market value in cash. This is true even if the house needs repair and cosmetic upgrades.

Many seniors are not able to keep up with home repairs and therefore a sale to one who doesn’t require any repair, cleanup, or remodel might be a great relief. The equity left after the sale is yours to walk away with after the sale is complete.

Reverse Mortgages Aren’t a Great DealWe Buy Houses Mid-Atlantic
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If you have a house that is not selling or you need a fast solution to sell a house quickly, contact us today for a free, no obligation offer on your house for sale!

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Contact us at 703-376-8027 or complete our Home Seller Questionnaire for your easy solution to selling a house fast!

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Comments (1)

Margo Currie
Exit 1 Stop Realty - Saint Augustine Beach, FL

If the senior homeowner wants to stay in their home, would an interest only be of value?

May 17, 2011 02:28 PM