When first created, the reverse loans were slow to gain acceptance.
Homeowners were reluctant to step into these types of loans. Reverse mortgages, once they gained ground and more people understood them, have
become fast growing loans. In 1989, the federal government began backing the reverse
mortgage. The National Council on Aging is promoting the reverse mortgage as a
terrific way to finance home modifications, medical care, and in-home care to avoid nursing homes. These loans can help homeowners prepare for
their golden years, whether that be for living the high life or paying for home
remodeling.
There are a few downfalls to reverse mortgages. Reverse mortgages can be taken out on many homes
and condos. Oftentimes, this can leave homeowners vulnerable. Beware - there are
disreputable people trying to cash in on reverse mortgages and can be found going door to door to sell them.
Also, closing costs can top $10,000. It is recommended that anyone considering a reverse mortgage do so
only after very careful consideration of their financial needs and the needs of those who stand to inherit the
home.
Reverse mortgages are predicted to increase even more in the next several years, especially
as retirement income and pensions are constantly threatened.
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