7/30/2023 0 Comments Ezip mortgageThe face amount will be slashed by higher-than-average closing costs, origination fees, upfront mortgage insurance, appraisal fees and servicing fees over the life of the mortgage. You don't receive the full value of loan.A reverse mortgage does not guarantee financial security for the rest of your life.Here's what you need to know to avoid being misled by reverse mortgage advertisements: Many ads did not mention information about interest rate or repayment terms. "The incompleteness of reverse mortgage ads raises heightened concerns because reverse mortgages are complicated and often expensive," the report states. Yet, the CFPB study found, many of these ads were characterized by ambiguity about the true nature of reverse mortgages and fine print that is both difficult to read and written in language that is difficult to comprehend. This makes them all the more vulnerable to sales pitches for reverse mortgages from trusted celebrities such as Robert Wagner, Pat Boone, Alex Trebek, former Senator Fred Thompson and Henry Winkler, who played the lovable cut-up "Fonzie" on Happy Days. Women, in particular, have a greater likelihood of outliving their assets due to lower savings and pensions. That's because an increasing number of Americans are retiring without pensions and, according to the Employee Benefit Research Institute, nearly half of retired Baby Boomers will lack sufficient income to cover basic expenses and uninsured health care costs. The reverse mortgage market makes up approximately one percent of the traditional mortgage market, but this figure is likely to increase as the Baby Boom generation-those born from 1946 to 1964-retires. And, according to a report from the Consumer Financial Protection Bureau, many advertisements are incomplete or contain inaccurate information. (What's your experience with reverse mortgages? Share your thoughts by leaving a comment below.)īut while a reverse mortgage may increase your monthly income, it can also put your entire retirement security at risk. Also, these loans, usually called Home Equity Conversion Mortgages (HECMs), are federally insured. The loan doesn't have to be repaid until you or your spouse sells the home, moves out, or dies. The money you get is usually tax-free and generally won't affect your Social Security or Medicare benefits. It takes part of the equity in your home and converts it into cash payments. However, the ads don't always tell the whole story.Ī reverse mortgage is a special type of home equity loan sold to homeowners aged 62 and older. Reverse mortgages sound enticing: The advertisements you see on television, in print and online give the impression that these loans are a risk-free way to fill financial gaps in retirement.
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