Reverse Mortgages have been around for many years and are misunderstood more than other options of borrowing money. In today's market had many people purchased their homes with a reverse mortgage the property would be upside down however there would be know concerns to the owner and the banks wouldn't be foreclosing or bothering the homeowner either. The mortgage is given to the purchaser that has approximately 50% down and the bank allows the resident to live there until they pass on to the ever after. Then the bank reconciles the balance and if there is equity that gets passed to the surviving heirs. If there is no equity the bank takes what they can get and has insurance to cover the short. This can be used to pull equity from a home if the owners need extra income in their later years. We see some retiree's using this product so they can buy a larger home than they could if they wanted to pay in full. The reverse mortgage allows you to pay roughly 50% down and not have any payments for the rest of your life. This allows people that were going to buy a $200,000 home to buy a $400,000 home and have the home they could only dream off without the reverse mortgage. If the mortgage is used with thought into the big picture it can be a very good tool in home financing. We would recommend talking with an estate planner to see if this could be a good fit for your circumstances. As we know all our circumstances are not the same.
We at the Burkhardt Team would be happy to discuss these topics and more with anybody that is interested and will continue to get you current information and ideas. Please forgive us for any inaccuracy's and feel free to give us topics you would like us to blog on.
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