Honolulu Mortgage Stars

The qualification for the reverse mortgages is simple. Everybody, who is age 62 or over and owns his or her home, where he has equity left, will qualify. Spouses and the groups of maximum three seniors are accepted, but all must fulfil the qualification rules, i.e. to be at least 62 and to be the owner of the home.

1. High Upfront Costs.

The reverse mortgages will do their basic job well. They really arrange seniors extra cash every month. The reverse mortgages do not have any monthly payments, but the loan capital, the interests and all the costs will be paid back, when the loan will be closed. This happens, when the last borrower will move away, sell the home or die.

The reverse mortgages have high upfront costs. If a senior thinks to live in a home for a short time, then these costs really seem too high. But if the home will serve for several years, the upfront costs per year are not that high.

2. The Hidden And Growing Expenditures.

The reverse loan seems very tempting, because the payment happens after several years and it honestly seems, that the money is totally free. Especially the interests form a big amount, because they will be calculated on the top of each other. However, a senior will never owe more than the value of the home.

If it happens, that the home selling price does not cover the whole debt amount, then the compulsory mortgage insurance will cover the missing part.

3. The Rising Home Prices.

The borrower, or borrowers, will remain as the owner of the property, not the lender. This means, that the home prices increases will become to the benefit of the owner, which will theoretically reduce the total costs of the reverse loan.

4. The Tax Benefits.

The tax benefit is maybe the biggest benefit, which the borrower can get. Actually he has paid the taxes once, when he has earned a salary with which he has paid the usual mortgage. Now, when he takes the equity out as the monthly installments, the money comes back to the owner in another form.

5. The Extra Disposable Cash.

This is, why the whole product has been invented. These seniors are called cash poor but equity rich. They are mostly seniors, with the pensions as the only incomes. And it is impossible to increase the amount of the pensions, so the only source of the extra cash is to turn a part of the home equity into cash money and to use it to pay the sudden cost increases. A senior has to judge by himself, whether the reverse mortgage loan is a product, which will fit to him. It is a little bit costly, but offers also good benefits. A meeting with the reverse mortgage counselor can open other opportunities.