| BBB Urges to Know the Facts about Reverse Mortgages
Raleigh, NC, May 30, 2007 --(PR.com)-- Beverly Baskin, president and CEO of the Better Business Bureau of Eastern North Carolina, advises long-term homeowners with equity built from homeownership, that a reverse mortgage can be a good investment. Reverse mortgages allow homeowners to turn their home equity into spendable cash without having to make monthly interest or principal payments.Under a reverse mortgage, the lender sends the borrower money via a lump-sum payment, a line-of-credit, monthly check or a combination of all three. The homeowner is not required to pay back any of the loan advances or interest until the loan term is over. Generally, no repayment is due until the borrower no longer occupies the house.Before venturing into a reverse mortgage the BBB, along with the Federal Trade Commission, suggest that homeowners consider the following facts:Reverse mortgages are rising-debt loans.
Home Equity Loan-reverse Mortgage-is There One In Your Future
Reverse mortgages have gotten a lot of publicity lately and will probably get a lot of press in the future as baby boomers near retirement age. What are they? Who can use one? Is there a reverse mortgage in your future? WHAT ARE REVERSE MORTGAGES A reverse mortgage is a home equity loan or line of credit that is secured by the equity in your home. You do not repay as long as you live in the home. The reason it is called a reverse mortgage is because it is the opposite of a regular home equity loan where you reduce debt and build up equity. In a reverse mortgage you reduce equity and build up debt. That is where the money comes from. WHO CAN USE REVERSE MORTGAGES Basically anyone who is over age 62, owns and lives in their own home and has paid off at least 60% of the loan can apply for a reverse mortgage.
Jack Naudi
I was all set to provide a glowing update to last year's column, one of the few in which I wrote about a specific product. Now, I'd say I've become more skeptical. A year ago, I wrote of the program: "It provides you with more money to invest in stocks and bonds." Well, that might be true in some cases. But in the vast majority of regular mortgages, it's not. Indeed, it's just the opposite. The program works as advertised only if you put more money into your home than into other investments.
But the Home Accelerator is dramatically different from a regular mortgage. In simplest terms, it's a lot like a home equity line of credit, but with a bit of a kick.
Under the program, your home equity line also is a bank account. You deposit checks into it, just as you would into a regular checking account.
|
