List of Reverse Mortgage Pests or Negative Elements

When you hear about reverse mortgage options you hardly get to hear about the “pests” or problems involved with it. No one for example alerts you of the huge closing costs associated with reverse mortgages or that a considerable part of the loan you collect will be eaten up by the huge cost that you have to put up with to get the loan. Also all the financial commitments on the house will have to be met by you. Expect to take care of estate and insurance costs (not to mention the actual HUD insurance on the reverse mortgage itself) as well as electricity, water and gas bills to mention but a few. Below is a list of “reverse mortgage pest” that are under our reverse mortgage rest alert program.

Pest number one is the fact that a reverse mortgage loan is drawn against the equity of your home. At your death or when you move out of the house, it would be sold to cover the loan denying your heirs an asset to inherit.

Huge costs are involved with reverse mortgages. Such costs include service fee, originating fee, closing costs as well as interest rates on the loan.

A very important reverse mortgage pest is that the value of your equity reduces monthly as your loan plus interest is compounded at the end of each month. Lack of monthly repayments reduces the equity of your home.

The interest that accrues on reverse mortgages cannot be claimed on your taxes until the loan is repaid.

The value of the reverse mortgage loan you receive is many times lesser than the actual value of the house.

Your children may inherit a bill accruing from the reverse mortgage loan that you received, when the interest and loan compounds over your equity. In this situation the reverse “mortgage pest” spills over to your heirs.

Your reverse mortgage loan could hinder you from qualifying for State or Federal Government assistance such as Medicare, it can also affect your access to social benefits.

I am sure that your broker did not alert you about this reverse mortgage pests factors. Subscribe to our Reverse Mortgage Pest Alert program and we would keep you alert.