subject: A Fresh Look At Reverse Mortgages [print this page] In recent years, reverse mortgages have grown in popularity. With many senior homeowners needing supplemental retirement funds, these loans have provided an excellent source of much-needed cash flow. However, declining home prices and significant closing costs have caused many people to overlook these valuable financial products.
While the significant fees associated with these products and the depreciation of home values has hurt reverse mortgage growth rates, the industry must accept much of the responsibility for the lack of reverse mortgage popularity among seniors. Strong sales tactics and lack of consumer education has created significant misunderstanding related to these loans. However, recent market conditions and the elimination of many fees by lenders may make for the ideal opportunity for borrowers to take another look at what reverse mortgages have to offer.
Earlier this year, a price-war of sorts began to break out among reverse mortgage lenders. Consumers have been the undisputed beneficiaries of this competitive environment. With banks constantly trying to one-up each other, borrowers have seen closing costs and fees for reverse mortgages decline by as much as $10,000 or more in some cases. This has meant that borrowers can access even more of their home's equity than ever before.
During this period of increased popularity, marketing strategies continue to cross the line between persuasive and misleading. While these loans are cheaper than ever before, seniors must be careful when selecting a mortgage broker. A good mortgage broker will take the time to explain the intricacies of these products.
Reverse mortgages can be tricky. However a good mortgage professional can cut through the difficulties and explain the loan's terms in a simplified fashion. When selecting a broker, make sure you find someone who's interested in learning about your needs and not just selling you a loan. By taking the necessary precautions now, you can save yourself significant headaches in the future.
