You hear a lot about the benefits of having a reverse mortgage from the West Virginia lenders trying to sell you a product. But what are the disadvantages of a reverse mortgage? Here we look at some of the pitfalls to be aware before taking out this type of financial product.
The first thing to realize is that there will be less equity in your home when it is time for you to sell it or move out. In fact, you have to be prepared for the fact that there may be no equity at all. The good news is that the amount that you owe in repayment of a reverse mortgage can never exceed the value or sale price of your home.
This reduction in equity may not be a big issue for you if you have no children. But say you have always wanted to give your kids a helping hand by passing on your home to them. This may not be possible if the equity is very low. The property may need to be sold to repay the West Virginia mortgage.
The next disadvantage is that the costs involved with a reverse mortgage can be very high. This applies to both the interest rate and associated fees. These fees can sometimes be added to the loan so that you do not need to find any cash upfront. But remember that this will further eat into the equity of your home.
Remember that a reverse mortgage can only be used on the property that you live in. It is not available for any rental or investment property that you may have.
Although many people find them a great financial help, there are also disadvantages to a reverse mortgage. You may want to speak to a housing counselor or get West Virginia legal advice before proceeding with a final decision.
Reverse Loan Calculator in West Virginia
The high expenses associated with reverse home mortgages seems to be one of the most significant arguments versus securing a reverse mortgage, one need to bear in mind that the cost of offering a home, which may include significant repairs in addition to the realty commission and closing expenses, will nearly constantly be higher than the expense of staying in the home and getting a life time stream of earnings for as long as you remain in the house. Additionally, it should be kept in mind that the closing expenses are not an expense expense, the expenses are financed into the loan, and not paid up until the loan is settled at the time the house owner completely leaves the house.
Educating yourself or a family member about a reverse mortgage is the only way to genuinely discover out if a reverse home mortgage is ideal for you or a loved one. Every senior that wants to apply for a reverse home mortgage needs to go through a no cost HUD therapy class to be sure that they completely understand how the reverse mortgage works and exactly what other options might be available to them.Reverse Mortgage Broker | Reverse Mortgage Loans