The 5 Ways How The Unethical Reverse Mortgage Deals Can Seriously Harm You

They think, that the older citizens do not know the things and that is why it is easy to cheat them

. The fact is, that the borrower, the buyer, has the responsibility about the reverse mortgage. It is important to be aware about the scam possibility and to prepare to handle it correctly.

1. Charging Free HUD Information.

This is quite typical fee, which the reverse mortgage scams try to do. They try to charge for an information, which is available for free on the HUD internet site. These companies are called the estate planning companies and can charge fees, which are around from 6 to 10 % to the total sum of the loan, meaning thousands of dollars. When a senior works only with the certified Reverse Mortgage Monitor lender he is able to avoid to pay.

Or some companies, which market the big ticket items, like insurances and annuities, try to use the reverse mortgage to fund these costs. But when the extra cost of the reverse mortgage loan will be factored into the purchase, the costs will grow much higher than the benefit.

2. Some Unethical Terms.

There are lenders, which add some extra terms and fees into the contract and these terms can seriously harm the equity balance of a senior. The lenders have used the shared equity or shared appreciation terms and succeeded to take a part of the appreciation, when the loan is closed.

3. How A Senior Can Protect Himself?

It is healthy to remember that the borrower is responsible about what he has signed. The reverse mortgage is a complicated product, which has a running time of many years. It is wise to get the needed information and the user experiences and then to build an own idea of the offers. However, the best guidance will be found from the free, federal counselor, who can also give recommendations about the trusted lenders. The counselor is always independent.

4. Make Sure You Understand All Details.

Especially if you have a situation, that you need money urgently, it is important to research the topic carefully, because after you have signed, you have to live with it through many years. If you are not sure, you can always show the offer to somebody and to ask guidance. A good adviser is the official counselor, show the offer to him.

5. Trust On The Lenders With Good Reputations.

The lender choice does not differ from your other choices. The reputation, the recommendations and the good image guarantee, that the lender is a trusted company and you can trust on them during the many years in the future.

by: Juhani Tontti

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