subject: Reverse Mortage Loan – Can A Senior Use It To Pay The Debts [print this page] Reverse Mortage Loan Can A Senior Use It To Pay The Debts
Many seniors, who think to take the reverse mortgage loan, struggle with the big debt problem, which actually seems too big to be able to pay away. Historically the seniors have had smaller debt amount than the other age groups, but during the last few years the situation has changed.
In 2008 the American seniors 65 or older had the credit card debt worth $ 10.235, but in 2005 only $ 8.138. During this time many people ate their future savings. Now these seniors age 62 and over ponder should they take the reverse mortgage loan to pay away these loans?
1. Is It Wise To Take The Reverse Mortgage Loan?
It is quite natural, that these seniors turn to the reverse loan option, if their only sources of an extra money is their home equities. That is the money, which they have saved during a long period of time and now they could use a part of that money to pay away the credit card debts and to get more disposable cash money.
However, first these seniors should ask themselves, how they have fallen into these difficulties? Has the financial situation got out of their hands? Have they spent the money without thinking how much they can afford? The first thing would be to research if they could change their spending habits.
2. Meet The Debt Counselor.
The debt counselor is an expert, who can guide the seniors. Their specialty is to learn the money management skills and how to win the debts and to reach a balanced situation. A counselor can find ways to refinance some of the debts, i.e. to reach longer payment time and lower interests.
3. The Debt Payments Will Improve The Credit Score.
This supports the idea to take the reverse mortgage loan, but is still one of the possible side benefits. It is true, that if a senior can remove the credit card debts from the credit statement, his or her score will improve and the loans become cheaper.
4. If A Senior Cannot change The Spending Habits, The Reverse Mortgage Loan Worsen The Situation.
To take a loan to pay the other loan is not recommended. The secret is in the spending habits and in the attitude towards the attitude. A senior must change the spending habits permanently, otherwise it is not wise to eat the home equity. The final decision is done naturally by the senior.
If he has met the counselor, told all the details about his financial situation and the counselor guides him to take the reverse mortgage loan to solve the situation, then the solution is clear. In thsi case the senior just have to change the spending habits, or she will be in the same problems quite soon.
