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Melvin Said:

Is a reverse mortgage a good idea?

We Answered:

A reverse mortgage works for some people and not for others. It depends on the appraisal value of the house and their age. You can either take the money as a monthly stipend or you can leave it as a line of credit to pay large bills for medical, taxes, insurance etc. Right now the interest rates are low so its a great time to consider one. Of course all the costs (including a small monthly handling fee) are added to the amount which will be due in the end. They have to pay nothing back until the last spouse dies or moves out of the house permanently for 12 months. At that time whatever has been taken out of the loan is due, the home is sold and the estate gets anything left over. If people want to qualify for income based services, I usually advise them to leave their money in the line of credit so it doesnt affect their monthly income and disqualify them for services. They have nothing to lose by talking to a person about a reverse mortgage. I would just caution them not to sign anything unless they are comfortable. Two of the largest and most reputable companies that do these mortgages are Financial Freedom and Wells Fargo.

Heather Said:

What problems can I encounter with a reverse mortgage.?

We Answered:

This is an excerpt from Smart Money.

"The problem with reverse mortgages? First, they don't come cheap. There are origination fees of up to $6,000 on a Fannie Mae loan, for example, and closing costs as high as $12,000 on a $150,000 loan. Also, your folks will face a lengthy application process that includes, among other things, mandatory counseling. Diana E. Watkins, a professor in Santa Clarita, Calif., had to wade through streams of paperwork to help her mother,

Esther Ormston Sell, pull $135,000 from her home last year. Then, on the day of the signing, they couldn't close because Sell had no picture ID (she had never worked or driven a car). "The banker told me that this is one of the biggest problems with women of my mother's generation," says Watkins, whose mom's attorney had to vouch for her identity.

You'll also have to use good judgment when considering a reverse mortgage. Given the costs of the loan, it is not a prudent way to cover short-term cash-flow needs. And sometimes it simply makes more sense to sell the house. For example, if your parent is diagnosed with a terminal illness and has only a couple of years to live, selling the house would provide more cash than a reverse mortgage, says Tom Scabareti, vice president at Financial Freedom. "

This one is another informative one: http://itsjustmoney.blogs.com/its_just_m…

Agnes Said:

How can i get a home loan with bad credit?

We Answered:

Was the home paid off prior to the reverse mortgage? Do you have a decent amount in savings? If so you may be able to just pay back the reverse mortgae, if nto you'll have to refi for whatever is left on the loan. Check out loanhomeonline.com/findamortgage. I dont have the best credit so had to shop around but taht site helped me find my b of a loan.