Typically, if you wanted to get cash from your home, you either had to borrow using your home as collateral, with monthly repayments, or sell your home. St. Louis mortgage attorney Steven Goldblatt can help you assess a more recent option to obtain money from your home, the reverse mortgage. A reverse mortgage is a loan against your home that allows you to turn the value of your home into cash, without having to sell the house or to repay a loan each month. You can take the money in one lump sum, as a monthly payment, as a line of credit that you draw down as you choose, or in any combination of the above. You do not have to pay anything back until you sell your home, move out of your home, or die.
A reverse mortgage can have tremendous benefits, including allowing senior citizens to stay in their homes with cash to pay bills and obtain services. However, as is usually the case where money is involved, opportunities for fraud and scam abound.
First, reverse mortgages are FHA insured loans, and all reverse mortgage lenders must be approved by the US Department of Housing and Urban Development (HUD). HUD determines rates and fees, and non-approved HUD lenders who claim to be HUD approved may charge rates and fees above those mandated by HUD.
Second, attempts have been made to convince seniors that they can make more money if they give up some of the future value of the home. In fact, all of the equity in the home belongs to the owner.
Third, some lenders attempt to add financial products to your reverse mortgage, such as insurance or annuities. There is no requirement that any such products be attached; in fact, in October 2008, the FHA made it illegal for a reverse mortgage company to condition the closing of a reverse mortgage on the “bundling” of an annuity or other product.
If you are, or a loved one is, contemplating a reverse mortgage, contact the Goldblatt Law Firm at 314-288-8455 and set up a free initial consultation with experienced St. Louis mortgage attorney Steven Goldblatt.