Reverse mortgage is applicable to senior citizens who are 62 years or above to avail loan without selling the house and retains the property ownership. This method helps the old people to stay in their home after the retirement and bank pays the monthly mortgage to the lender DC Fawcett .
Once the borrower relocates or passes away or when entire property is sold out the amount has to be settled to the lender. Reverse mortgage is the last solution during the mortgage crisis where borrower is free from mortgage interest and loan amount.
It is applicable when the borrower earns minimum income and all financial expenses have to be dealt preventing from foreclosure. The method is used to fund the senior citizens who want to increase their income as their house is considered to be their largest asset after retirement. The 3 qualifying factors to avail loan are age of the citizen, value of the property and interest rate.
Dc Fawcett Reviews states the advantages and drawbacks of using reverse mortgage
Pros:
- Disbursement option (i.e. you can either take checks every month or take a lump sum from the bank
- Senior Citizens continue to live in the same home and entitled to have property ownership
- The reverse mortgage funds can be used to pay the existing mortgage loans
- Heirs of the senior citizens are not legally answerable if the loan amount due exceeds the property value and can avail home equity after paying reverse mortgage loans.
- Tax free revenues and low interest rates
Cons:
- Taking a lump sum to cash out is not a good idea as it results in annuity.
- Not suitable if there are younger members in a family /joint family system
- Value of the property may decrease
- Insurance premiums like FHA and other fees are quite expensive.
- Decrease in equity resulting in less amount left for heirs of the senior citizen
- Should reside in the same house until all property taxes and insurance premiums are paid, else it results in foreclosure.
Reverse Mortgage scam is usually in form of misleading information like economic stimulus notice, government lending division, FHA house benefit program which falsely state that the heirs of the senior citizens will continue to inherit the house.
Dc Fawcett has given his solutions to on-going complaints received from the investors regarding reverse mortgage. They are
- The lender is entitled to take the property ownership which is absolutely not true, the ownership remains with the borrower.
- The loan may exceed the property value is also false; the reverse mortgage scheme ensures that the heirs will not have more loan value at time of maturity.
- It may lead to eviction is not true, the time of leaving the home is absolutely borrower’s choice.
Conclusion:
DC Fawcett has thrown light on myths, benefits and drawbacks of using reverse mortgage. To master the art of virtual real estate wholesaling, the interested investors can join DC Fawcett Virtual Real Estate investing club to know more about reverse mortgage.