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MBA Urges Regulators To Avoid Invoking Suitability Standards
The Mortgage Bankers Association (MBA) recently made a preemptive strike against what it obviously perceives as the next threat against the mortgage industry - "suitability standards." Read more...

 

A Couple Of Pros And Cons To Reverse Mortgage Loans

Have you been looking at a reverse mortgage loan as a way of increasing your retirement income? Today, the reverse mortgage loan has become a hot trend in the financial and mortgage world, but as attractive as it may appear at first, there are important factors you need to keep into mind. This article will offer a short look at a few of the more important pros and cons to this type of mortgage loan program.

One of the best parts to a reverse mortgage loan is the fact that it represents a tax free source of money that can continue to come in month after month for as long as you live. A reverse mortgage loan also allows you to continue living in your home. You will also have the option of getting your loan funds in a lump sum payment, line of credit or as a monthly payment. So you can choose the payment option that will work out the best for your financial situation. Another great thing is that you can get a reverse mortgage loan regardless of your current credit situation. Another excellent aspect of a reverse mortgage loan is that you will never owe more than what the value of your home is. This means that if you end up receiving $200,000 over the life of your reverse mortgage loan, but your home is only valued at $175,000, you will not have to come up with the difference. This includes your heirs as well in the event you pass away.

Now it's not all rainbows and sunshine. A reverse mortgage loan will come with fees and closing costs with it. Every loan broker or bank will be different in the fee schedule, but all of them include these costs. With a reverse mortgage loan you will lose the equity in your home since that is how the loan amount is based. You will also need to maintain your home in good condition and be current on your property taxes.

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