Some Things to Watch Out For With Reverse Mortgage Lenders

A reverse mortgage can solve a lot of problems.  If you own a home and are over 62 years of age, then you may be sitting on a lot of unused equity.  A portion of the equity in your home can be converted into cash for your personal use.  However, as with every financial decision comes the need to take a closer look at what the pros and cons of a reverse mortgage are.

Reverse Mortgages, the Dark Side of Converting Equity to Cash

With reverse mortgage lenders in Hawaii, you will have to go through a process before you can take out a reverse mortgage on your property.  This begins by talking to a an FHA approved counselor.  It is there purpose to make you aware of all the financial risks that come with a reverse mortgage and assist you at looking at alternatives.

One possible pit fall are the costs and fees associated with the loan.  Although the fees are government regulated, and have come down over the years, it may not make sense depending on how much cash you actually may be eligible for.  As a result, you should review all of these costs and fees carefully before agreeing.

Another consideration is how a reverse mortgage may affect your eligibility for other types of loans.  With a reverse mortgage you cannot get a 2nd mortgage.  In addition, because there are no payments with a reverse mortgage, the interest is being added to the original principle, thus slowly eating up the remaining equity.  This in turn can affect the amount your heirs may receive.  Many seniors work to leave a large inheritance via their home, and a reverse mortgage cam definitely affect that.  Finally, by getting a reverse mortgage, the applicant may lose their Medicaid.  As a result, be aware of the Hawaiian benefits you may lose as a result of having a reverse mortgage loan.

Despite the cons, there are several reasons why a reverse mortgage may be a good idea for you at this time in your life.  If you are having trouble paying for medical needs, repairs on the house or if you simply want to be able to visit the grandchildren, then a reverse mortgage may be right for you.

The Next Step

For more information or for a FREE, No-Obligation Quote, contact:

Daniel Nicolosi
Hawaii Reverse Mortgage Specialist
Certified Senior Advisor
Harbor Financial Group – Your Aloha Mortgage Solution
700 Bishop Street, Suite 210
Honolulu, HI  96813

You can reach Daniel directly at (808) 799-8218 on Oahu; or Toll Free at 888-423-2468 on the Outer Islands.

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