The reason I'm writing this article is I'm getting many questions from my customers asking me if this is the reverse mortgage is the right answer for them.
You may not believe this but I always say it is not a great choice for everyone. Its situational and some borrowers should simply walk away.
Most people calling me don't have tons of money in stocks, bonds and savings. They have very little and need money, which is why they are calling me.
Generally speaking most are on social security and some form of pension, but others are still working and planning on retirement.
When they ask me their question Im primarily focused on their long term equity position in their homes. They may need that equity if a major financial issue presents itself.
Lets face it life happens and we have to be ready for it. That means we have to be financially ready.
Along these lines I like to see prospective borrowers use the mortgage intelligently to increase their disposable income and to use that income in the proper places.
The reason being is the house is going to be the biggest store of cash for any of these individuals. If that is floundered away they could be in a real bind later on when something big comes along.
If the concern is for the event of a major financial mess then the borrower needs to be very prudent. Many want to pay off a mortgage and eliminate that payment. Waiting to do this may be a good idea.
If there is no mortgage I like to see folks use the line of credit option and use their proceeds sparingly. By using proceeds this way interest accrues minimally against the equity of the home.
Serendipity of the line of credit is the unused portion of the money line accrues interest and actually grows. This has the net effect of growing the line of credit for use later.
As a guy who gets people these loans I know they are a real benefit. However, they can be misused and I implore you to use them with care.
You may not believe this but I always say it is not a great choice for everyone. Its situational and some borrowers should simply walk away.
Most people calling me don't have tons of money in stocks, bonds and savings. They have very little and need money, which is why they are calling me.
Generally speaking most are on social security and some form of pension, but others are still working and planning on retirement.
When they ask me their question Im primarily focused on their long term equity position in their homes. They may need that equity if a major financial issue presents itself.
Lets face it life happens and we have to be ready for it. That means we have to be financially ready.
Along these lines I like to see prospective borrowers use the mortgage intelligently to increase their disposable income and to use that income in the proper places.
The reason being is the house is going to be the biggest store of cash for any of these individuals. If that is floundered away they could be in a real bind later on when something big comes along.
If the concern is for the event of a major financial mess then the borrower needs to be very prudent. Many want to pay off a mortgage and eliminate that payment. Waiting to do this may be a good idea.
If there is no mortgage I like to see folks use the line of credit option and use their proceeds sparingly. By using proceeds this way interest accrues minimally against the equity of the home.
Serendipity of the line of credit is the unused portion of the money line accrues interest and actually grows. This has the net effect of growing the line of credit for use later.
As a guy who gets people these loans I know they are a real benefit. However, they can be misused and I implore you to use them with care.
About the Author:
For those living in Texas.. get a great 12 page reverse mortgage guide here. Also, Have 20 questions answered about the Texas reverse mortgage at this linkright here.
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