As Seen on Eyewitness News on Five : "Reverse Mortgage".
By: Chris Clackum
Updated: March 15, 2013
You've probably seen the ads... A former, famous celebrity... Pitching a reverse mortgage...As a way to get money out of your house without selling it.
But they never quite explain how.
"Instead of you making monthly mortgage payments to the lender, the lender gives you a monthly payment, or a lump sum payment or a line of credit that goes against the equity in your home" said Norma Garcia, Consumers Union
It's marketed to an older audience because you have to be over sixty-two to qualify.. and consumer union's Norma Garcia says that's not the only thing the commercials may not tell you.
"It's a very expensive way to borrow money against their home, and it's a decision that needs to be entered into very carefully, if at all."
Expensive because you're still responsible for property taxes, insurance, and maintenance. Fail to keep up and your loan could come due... Meaning, you could lose your house.
Consumer's union recommends alternatives to the deals being pitched on TV... Like looking to family members for a kind of "in-house" reverse mortgage.
"So that everyone benefits that will actually result in preserving the equity in the home rather than shipping the equity off to the reverse mortgage lender" said Garcia
Which she says can easily be set up through a cpa and a lawyer.
http://www.defendyourdollars.org
But they never quite explain how.
"Instead of you making monthly mortgage payments to the lender, the lender gives you a monthly payment, or a lump sum payment or a line of credit that goes against the equity in your home" said Norma Garcia, Consumers Union
It's marketed to an older audience because you have to be over sixty-two to qualify.. and consumer union's Norma Garcia says that's not the only thing the commercials may not tell you.
"It's a very expensive way to borrow money against their home, and it's a decision that needs to be entered into very carefully, if at all."
Expensive because you're still responsible for property taxes, insurance, and maintenance. Fail to keep up and your loan could come due... Meaning, you could lose your house.
Consumer's union recommends alternatives to the deals being pitched on TV... Like looking to family members for a kind of "in-house" reverse mortgage.
"So that everyone benefits that will actually result in preserving the equity in the home rather than shipping the equity off to the reverse mortgage lender" said Garcia
Which she says can easily be set up through a cpa and a lawyer.
http://www.defendyourdollars.org
