I first heard about Reverse Mortgage loans from a friend who attended a reverse mortgage seminar. The seminar hyped on all the so called benefits of reverse mortgages without telling you that it is just a sham to rip off the only asset that you have left. Now I look back with regret knowing that my beautiful home that I spent years paying for the mortgage to truly own it is now worth almost zero equity.
One thing that so called promoters of reverse mortgage loans fails to stress is that the loan or credit that you receive is deducted from the equity of your home. With each monthly payment or income that you receive your home equity reduces. Then there are the high interest rates associated with reverse mortgage loans. So for each amount you get your home loses value of the said amount, plus interest and then plus interest based on the fact that the loan would not be repaid for a while. So while you may think you are accessing credit you are just being ripped off the asset that you struggled for years to acquire. At the end the amount that you get is far below the actual value of your home so as to accommodate the fees and interests.
I have heard of people who claim that they benefited from reverse mortgage loans but to me it is all a scam and a sham. How can you benefit from something that throws away what you worked for and used years to acquire. The dream of many is to be able to pay off their mortgage and fully own their own home. Just as soon as you are able to achieve this, reverse mortgage lenders come with their sham plan to take it away from you.