A reverse mortgage is one viable way to tap into home equity for urgent or ongoing financial needs, writes MarketWatch in an article this week that compares different tools for borrowing against home equity.
Versus a home equity loan or a home equity line of credit, the “catch” with reverse mortgages is that they are only for people who are 62 and older, MarketWatch states. The article also points to the fees that come with reverse mortgages, as well as the mortgage insurance premiums that are required, as potential negative factors.
The article appears to have missed the financial assessment rules implemented last year, as it says in error that there is no credit check or income requirement.
MarketWatch does cover the loan obligations including property taxes and homeowners insurance that must be met.
While reverse mortgages have gotten a bad rap because earlier products required the homeowner to turn the title over to the bank, they can be the right product for the right people, the article states, based on an interview with Darren Ferlisi, a mortgage officer at Integrity Home Mortgage in Frederick, Maryland.
Written by Elizabeth Ecker