San Diego, CA (PRWEB) August 26, 2013
LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending news, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. In keeping with the website’s dedication to keep their readers informed on their different loan options, Loan Love recently released a guide which answers the question “How do reverse mortgages work?”
The Loan Love article explains: “It used to be that even just a few years ago, reverse mortgages were viewed with suspicion: After all, these loans are marketed to homeowners who are at least 62 years old, and a lot of critics have charged that the lenders who handled the loans might be trying to take advantage of “the elderly” (really? 62 is elderly?) or that older consumers might not be able to fully understand the ins and outs of reverse mortgages. Of course, that last point could be said of anyone – mortgages of all types can be notoriously difficult to understand, no matter how or young or old you are.”
“But today, the attitude toward reverse mortgages has changed; even the Wall Street Journal notes the loans are being used – legitimately – by homeowners of all income levels who want to tap into their home’s equity without having the burden of monthly payments. As that article notes, while it used to be thought that reverse mortgages were used only by consumers facing potential financial difficulties, today’s reverse mortgages are regularly being used as tax shelters and as part of an overall investment strategy by seniors who are financially well off. Let’s dive in and answer the question, “how do reverse mortgages work?”
The article then explains that reverse mortgages work by allowing the homeowner to access their home’s equity without having to sell their home or make monthly payments. In return, the bank or loan servicer gains an interest in the home, and in the even that the owner dies or moves away, the bank will claim that equity back through the sale of the home. Just like the home regular home equity loans, which reverse mortgages are modeled after, there are many types of reverse mortgages, namely lump sum, line of credit, or fixed monthly amount. Sometimes homeowners will choose a combination of these three options. Probably the most attractive feature of these loans is that there are usually no income requirements and taking on a loan will not affect the borrower’s Social Security or Medicare benefits.
The article also says: “Recently, President Obama signed a new, bipartisan bill into law that offers more protections for both lenders and borrowers. For instance, instead of just being required to participate in an informational session about the loans, today’s borrowers must have – again, free of cost – financial counseling to make sure the loan they get is the best one for their needs.”
Potentially these types of mortgage loans can be a godsend to older homeowners. For more information on reverse mortgages, please visit LoanLove.com for the full reverse mortgage guide.