Are Reverse Mortgages Good?

There has been postcards in mailboxes all over our neighborhood in Summerlin Las Vegas.  It starts our talking about a "NEW" goverment program that protects seniors.  It offers you to respond to the Senior Information Processing Center.  Never once in the add does it mention Reverse Mortgages, but doing a little investigation that is exactly what it was.

Reverse Mortgages can be a good thing.  It can offer a senior money to pay off their exsisting mortgage, repair their home, have more income and have a better lifestyle. Reverse Mortgage's afford you to still be the owner of your home, do not affect social security, there are no tax consquences.

That being said at some point this loan has to be paid back.  As soon as you either pass or sell the house everything comes due.  The debt at the time includes everything that they have sent you, plus interest, plus you original closing costs.  If you have passed your heirs will get what is left over.  If you can no longer live in the house and are going into assisted care what is left over is what will be available to contribute to that care.

Depending on your circumstances a Reverse Mortgage can be a good deal.  Make sure you get all of the facts.  Here is a good webite you can get information.  Also AARP has a lot of information.       

DON'T GET "PRE-QUALIFIED”!

Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller.

In years past, I always recommended that buyers get "pre- qualified" by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you "pre-qualified" and issues a certificate that you can show to a seller.  Sellers are aware that such certificates are WORTHLESS, and here's why! None of the information has been verified! Oftentimes unknown problems surface!

Some of the problems I've seen include recorded judgments, child support payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the client's bank account long enough, etc. So the way to make a strong offer today is to get "pre-approved".

This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.