There's been a lot of talk and media coverage as of late about reverse mortgages and the opportunities they present senior citizens. In all, American borrowers will assume about 120,000 of the most popular reverse mortgages this year, according to the National Reverse Mortgage Lenders Association.
With reverse mortgages, homeowners receive a lump sum, a monthly amount or a line of credit and don't have to repay the debt for as long as they live in their homes. Dozens of the national organizations and advocacy groups, such as the AARP and the National Council on Aging, have touted these unique mortgages as way to use equity to cover costs such as health-care and other long-term needs.
The reverse mortgage loan has appeal to a homeowner that has been in their home a long period of time. When considering a reverse mortgage, it is important to investigate the details of the mortgage. Upfront costs can be high when the loan is very high, and the pay off time is over a long period of time as opposed to a shorter period of time.
With an FHA-insured reverse mortgage, you must pay a 2 percent loan origination fee plus a 2 percent fee for mortgage insurance.
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