Reverse Mortgages Gain in Popularity

So, after all the fiascoes with subprime mortgages and lax underwriting standards (if you can call them that), “no doc” loans are a thing of the past, right?

For the most part.

However, there’s still a niche of the market where lenders are approving borrowers with virtually no paperwork: reverse mortgages.

The catch, of course, is that with a reverse mortgage, the bank is making monthly payments to the borrower, not the other way around.

Reverse mortgages are particularly suitable for older, long-time homeowners who have modest income, but a ton of equity in their existing home.

Lenders are more than happy to let such “borrowers” tap that equity to make a reverse mortgage on the purchase of a “downsized” property.

Even more than with traditional mortgages, fees and terms on a reverse mortgage are key.

In other words, do your homework!

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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