There are over83 million mortgagesin the United States, worth an estimated 12 trillion dollars.
The Better Business Bureau is cautioning consumers about a type of mortgage that could be more trouble than it’s worth.
With home interest rates currently around 7.6 percent, fewer of us are moving or buying homes. This has homeowners looking for creative ways to get more equity out of their homes.
Reverse mortgages have become popular for older Americans to help pay for their retirement without having to sell their property and move. The cash may be paid to you in installments or a lump sum. However, because these loans are so attractive, unscrupulous individuals sometimes try to cash in and will target older adults in particular.
Last year, the Better Business Bureau received 4,137 complaints about mortgage services. Regional Director of the BBB in Springfield, Missouri Pamela Hernandez says it’s important to know every detail behind a reverse mortgage before agreeing to one.
“With a reverse mortgage you can already increase the amount over time because you’re not making payments and that interest will add up. So you can actually end up with a reverse mortgage that is equal to the value of the home, but you have no equity left.”
Pamela warns it's likely a red flag if a company tries to charge you excessive, up-front fees for services that are available free of charge or at a very low cost through the Department of Housing and Urban Development.
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