Reverse Mortgage – Be Sure You Need It Before Applying For OneWritten by Charles Essmeier
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people who take out a reverse mortgage opt to take their funds in form of a line of credit, rather than a lump sum or monthly payments. There are advantages to a line of credit, which allows borrower to use funds by simply writing checks against loan. The primary advantage is that borrower only uses funds when he or she needs them. Because of this, interest only accrues on money if borrower actually writes checks. Borrowers should be aware, however, that costs of loan, which can be substantial, apply even if borrower doesn’t write any checks against loan. If homeowner takes out a line of credit and decides to sell home shortly thereafter without ever having written a check against loan, borrower will not owe lender any interest or principal, but borrower will lose money paid for cost of loan, which is not refundable. If borrower rolled costs into loan itself, they could owe payments even if they never wrote a check.
In short, borrowers considering taking out a reverse mortgage should make sure that they plan to stay in their home for quite some time and that they actually need money from such a loan. A reverse mortgage is a great idea for those who have a specific purpose or use in mind, but as an emergency source of “rainy day” funds, it can be an expensive choice.
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.
| | Young People & DebtWritten by Matthew Crist
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One other young debtors can find relief is to set budgets. Card holders need to find out how much they can afford to put towards their credit card debt, and then such sites as CNN’s debt reduction planner (http:// cgi.money.cnn.com/tools/ ) can help them distribute money to cards in such a way as to reduce debt as fast as possible.
Matthew Crist runs a debt reduction blog. You can find more at http://creditbang.com.
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