Tag Archive for terms

Reverse Mortgage–Boon or Steal?

Now I’m getting offers for a “Home Equity Conversion Mortgage,” although it sure seems like a “Reverse Mortgage” to me. Rules are the same. If you’re considering one, figure out if you can live with those rules (from AAG mailing):

  • You must occupy your house as your primary residence. [Reasonable.]
  • You must pay for ongoing maintenance, or the loan becomes due and payable. [Does the loan default if they decide that your maintenance isn’t adequate?]
  • You pay all taxes and insurance. [Can be expensive.]
  • Loan is due and payable, and maybe foreclosed on, when you, (the borrower) or “eligible [whatever that is] non-borrowing surviving spouse” dies, sells the house, moves out permanently [can mean into a nursing home], defaults on taxes or insurance payments, “or does not otherwise comply with the loan terms [you know, all that legalese in the fine print that’s hard to read or understand or is vague enough for them to interpret it their way].

By the way, you still pay interest, because it’s still a loan. And your income taxes get complicated.

Pass on this information to all your older friends and relatives before they sign on to one of these “fantastic deals”!