Reverse Mortgage: Pros & Cons
There are many senior citizens who bought houses way back when the prices were quite low. Now the prices of these homes have doubled and in some cases, even trebled. Instead of sitting on so much idle money, many of these people want to use the equity in their homes. One way of doing this is by taking a reverse mortgage.
However, if you belong to this category of people and want to use your home’s idle equity, one of the first things you need to do is answer a few questions: "Are you in reasonably good health and do you plan to stay in your home at least five years?" If your answer is "yes," then a reverse mortgage could be ideal for your situation. There are also quite a few other things you need to take into consideration before you decide to cash in on your home’s equity. Mortgage101.com reports:
However, I do not recommend obtaining a reverse mortgage to use the cash for investments because chances of your earning at least as much as the money costs are very slim.
Read more: How to free up ‘dead money’ in home equity
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September 12th, 2006 at 11:30 am
Refinancing Advice From The Feds
A Consumer’s Guide to Mortgage Refinancing prepared by The Federal Reserve Board and the Office of Thrift Supervision, says refinancing can be a good idea for homeowners who:
• want to get out of a high interest rate loan to take advantage of lower rates.
• have an adjustable-rate mortgage (ARM) and want a fixed-rate loan to have the certainty of knowing exactly what the payments will be for the life of the loan.
• want to convert to an ARM with a lower interest rate or more protective features (such as a better rate and payment caps) than the ARM they currently have.
• want to build up equity more quickly by converting to a loan with a shorter term.
Prospective borrowers looking for refinancing can take advantage of sites like http://www.badcreditmortgagerefinancingnow.com that offer helpful information and a free, no-obligation quote.