Reverse Mortgage Loan Blog

Mr. Finance Guy, you mean there is another scam alert?

John Henry McDonald: Oh yeah, there seems to be no end to the number of ways that shysters foist bad ideas on our elderly population.

And since I’m fast becoming a part of that population, I am a little sensitive. Reverse mortgages are essentially a loan against your house that you don’t have to repay until you’re dead or the house is sold.

If your 62 years old, and your mortgage is paid off, you can have one. Not much more is required.

So there is a whole lot money out there, in the form of equity, that salesmen and women can tap-132,000 were taken out 2007, up 50 percent from 2006. I pretended I was 70 years old, that Miss Louise was 60 years old, and I made like I was applying for a reverse mortgage on a $300,000 home.

Based on the information I gave, HECM said they would provide me a loan of $133,664 in a lump sum to be used any way I wanted to, or a monthly check for as long as I lived in my house of $786.

Now here’s the deal. Unscrupulous insurance salesmen and women are taking advantage of these loans and placing the lump sum in all kinds of investment products-most often some kind of annuity. The reverse mortgage is something you can use if you need to dollars to improve your life.

Use it only if you absolutely need it.

I would stay away from any kind of scheme that encourages you to put money in an investment of any sort.

Found here.

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