Reverse Mortgages: A Popular Way to Finance Retirement -- But Beware of Scam Artists


Many seniors enter their "golden years" with bleak prospects because of increasing debts, poor debt management and decreasing buying power.

One thing many seniors have in common is their main asset -- their home. Many elderly people own a home, and often they have either substantial equity in the home, or they own the property free and clear.

While some people seek to consolidate debts by getting a new mortgage loan or a second mortgage, many seniors don't have enough income to qualify. And even if you qualify for the home mortgage loan, the prospect of paying off a 30-, 20- or even 15-year mortgage note may mean having to greatly tighten your belt for the rest of your life, creating undo financial hardship and stress.

Now you have another option

A reverse mortgage is a special type of home equity loan that lets a homeowner convert the equity in the home into cash. The home equity built up over years can be paid to you in a lump sum, in a stream of payments, or as a supplement to other income. Loan advances are not taxable and do not affect your Social Security or Medicare benefits. But unlike a traditional home equity loan, no repayment is required until you no longer use the home as your principal residence. For many seniors a reverse mortgage may be the solution to substantially improving their financial position, eliminating many money worries like paying the household bills and properties taxes, eliminating credit card debt and loan debt.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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