SOUTHWEST LOUISIANA (KPLC) -
There's been news coverage of a case out of Philadelphia where several widows faced foreclosure on their homes —because their husbands had taken out reverse mortgages.
What should you watch out for if you're thinking about taking out such a loan.
The TV ads say "You'll learn the benefits of a government insured reverse mortgage." What are they?
Reverse mortgages are a way to turn your home's equity into cash. And most of the ads offering such loans say you will never have to leave your home before you die.
But Carmen Million with the Better Business Bureau said it's important to fully understand what you're getting yourself into.
"A reverse mortgage is not for everybody so you need to determine what a reverse mortgage is and if it's something that would benefit you," she said.
Before you sign up for a reverse mortgage, it's important to consider a number of things, such as how it will affect your spouse and your heirs if you hope to leave anything to them.
"Maybe not you, during your lifetime, but your spouses or your heirs may not have any rights to that home once the person who signs the contract is deceased. So you need to make sure you understand what your rights are in relation to your spouse and your heirs," Million said.
Contracts can be hard to understand, so you may want to have your attorney review anything you plan to sign.
"You would need to read your contract and understand exactly how it works, how it's going to benefit you versus, you want to take into consideration the benefits versus any negatives," she said.
Under no circumstances with any loan should you be asked to pay some money up front.
And it's important for borrowers to remember even with a reverse mortgage, they still must pay taxes, insurance and maintenance on their homes.
HUD has a lot of information on reverse mortgages and what to watch out for. Click HERE for information.
see more: http://www.kplctv.com/story/29676410/reverse-mortgages-look-before-you-leap
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