A reverse mortgage, as the name suggests, is a mortgage in which you do not pay a fixed amount of money to the bank, rather the bank or the lending company pays you. Does that sound too good to be true? Well, this is, in fact, a financial product that is only available for senior retired citizens to purchase. This financial product is sold by the reverse mortgage companies. Before you contact them for more information, you should know the good, the bad and the ugly sides of a reverse mortgage company.
The Good: The best part of a reverse mortgage company is that the lender would not pull out your credit report. This means that even if you have defaulted on your loan previously or have an extremely poor credit score, you will get the loan easily based on the value of your house. Also, the payment that you receive from a reverse mortgage company will not be taxed, as it will be treated as a loan.
The Bad: The fee for this product is extremely high. To take out a reverse mortgage, the borrower has to pay a fee that is more than the fee that is paid when buying a traditional mortgage.
The Ugly: If the borrower only takes out the loan in their own name, then it means that after the borrower’s death, the lender will have the legal right to liquidate the property and recover the amount lent. This means that your spouse and children will not be allowed to live in that property and will get whatever is left after the lender has recovered their amount.
Longbridge financial is a reverse mortgage company and is approved by the Federal Housing Administration (FHA). It operates in 46 states and is committed to providing financial peace of mind to the elder generation. It is a member of the NRMLA and is considered as the best reverse mortgage provider in New Jersey.
