A MORE PROFITABLE ALTERNATIVE

January 23rd, 2009

You’ve probably heard the term “reverse mortgage,” which refers to a loan that allows homeowners aged 62 and older to tap the equity in their home, without repaying it.  This has become an increasingly popular way for retirees to generate extra income for living expenses and paying off debt.

However, high fees and aggressive sales tactics prompted the Senate Special Committee on Aging to recently issue an investor alert.  The intention behind the warning is not to discourage reverse mortgages, but rather to encourage homeowners to make sure it’s the right loan product for them.

The biggest downside to such an agreement is that the up-front costs for application, legal fees, document recording, and loan origination fees can sometimes top 10% of the loan’s value.  For this reason, the federal government requires meeting with a financial counselor prior to applying for a reverse mortgage, helping ensure that it’s the best loan product for your situation.

In addition to a financial advisor, you are strongly encouraged to consult with me since I’ve completed the course “Senior Real Estate Specialist” which covered Reverse Mortgages.  Simply put, you might generate more income by selling your home and moving to a less expensive one, directly pocketing the equity you’ve worked so hard to build over the years.  An Associate Broker from Don Kingsley Real Estate can compare your home’s value to other attractive properties on the market, and guide you to a profitable conclusion!

Please feel free to contact me if you are in need of real estate guidance.  I would be happy to share my knowledge with you at no cost or obligation.  If you prefer, email me at donkingsley@kingsleyrealestate.com.

Entry Filed under: Buying A Home, Financing, Real Estate Tips, Selling Your Home