Reverse Mortgages

Why are reverse mortgages controversial?

They are controversial because many lenders target an older, less informed market of potential clients, who may not be aware of the many risks of pulling out equity from their home. The fees themselves are very large, compared to other forms of loans, and there is a risk that home prices may not increase, and therefore make it very difficult for the loans to be paid off. There are no income requirements for obtaining this type of loan.

Advertisements for reverse mortgages are on the increase. They may sound like a good deal for those who own their own home and are looking to have a more comfortable retirement, but be careful. Reverse mortgages often come with hefty fees, and you could find yourself in trouble if your house does not increase in value.


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