July 2, 2012
Tread Carefully With Reverse Mortgages
Are you considering turning to a reverse mortgage in order to cope with rising expenses? Make sure you understand the risks and how to protect yourself.
Many seniors on fixed incomes turn to reverse mortgages to help cope with rising expenses. Reverse mortgages allow qualified homeowners over age 62 to borrow against their home's equity to either continue living in their home, downsize or relocate without making monthly mortgage payments.
But reverse mortgages come with costly origination fees and require ongoing mortgage insurance. Plus, you're still responsible for paying any homeowner's fees, property taxes, insurance and repairs for the life of the loan.
Bottom line: Reverse mortgages can be a financial lifeline, but make sure you fully understand the risks involved.
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