Reverse Mortgage Lenders Denver Colorado

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Denver, Colorado Reverse Mortgage, Free Information On The Advantages and Disadvantages for Reverse Mortgage Loans in Denver, Colorado Denver, Colorado

A reverse mortgage is a loan that uses your home's equity as collateral. Instead of borrowing money from a bank to purchase a home, you borrow money against the value of the home you already own. There are some advantages to using this type of loan, but there are also disadvantages that you should consider before deciding to borrow money in this fashion.

Advantages of Using a Reverse Mortgage Denver, Colorado

It is often difficult for elderly people to secure low-interest loans that they might need for health care, a source of income during retirement, or other situations. Many lenders simply do not want to give elderly people loans because they worry that the borrowers will not be able to repay it. After all, they don't always have a reliable source of income and they could pass away before the loan has been repaid. A reverse loan on a house, however, makes lenders feel more comfortable because they have a firm source of collateral that lowers risk significantly.

Disadvantages of Using a Reverse Mortgage Denver, Colorado

There are numerous disadvantages to using this type of loan. The biggest disadvantage is that you could lose your home. If you find that you cannot make payments at some point in the future, than the lender can take ownership of your property. Suddenly, the advantage of using your home as collateral turns into a big problem. There's also the possibility that your loan could exceed the value of your home. Reverse mortgages usually have fairly high interest rates. Over 30 years, compound interest can put your house "under water." When that happens, you owe more than your home is worth. Even if you sell your home, you could still owe more money. Palm Bay

Back-up plan: reverse mortgages can help folks afford retirement, but are they a good offering for insurers with banks?(Life: Reverse Mortgages)(Statistical table): An article from: Best's Review
Book (A.M. Best Company, Inc.)

3 to 5 year minimum

2009-01-31 11:30:30 by RM_Guy

If you are considering a reverse mortgage, plan on staying in the home for at least 3 to 5 years. I do not advise a shorter time period. The longer you have a reverse mortgage the less expensive the closing costs become. This is because you spread the costs over a greater number of years, thus lowering the annual costs.
In this respect they are similar to a "forward" mortgage. You would not get a 30 year forward mortgage if you knew you were leaving the home in 2 years, too expensive.
There are no "points" in a reverse mortgage. HUD does not allow such deception in reverse mortgages

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