Most of the times people go for loans without paying much attention to the fine print. This leads to a lot of complications for them later. The problems multiply when the loan taker is an elderly person who has limited sources of income and living a retired life. These people later blame the lenders and claim that what they were offered was a trap to rip them off. In most cases this is not true because understanding the terms for a loan is the most important thing that one should do before getting a loan.
Like other loan schemes reverse mortgage loan is no different. It provides the seniors with the much needed money at the time when they have no other source of income is present and working is no more an option available to exercise. The terms and conditions of reverse mortgage make getting the loan easy for the seniors but at the same time protect the investments of the lender. This sometimes is considered as a rip off by those who did not bother to understand the terms and conditions before taking this loan.
This loan is for those senior citizens who are willing to pledge the house which is their primary residence. This means that they are not getting any kind of rent from that accommodation and they are also not living in a facility for the seniors or with their children at another location. This also insures that the house will be kept in a livable condition. In many cases when a house is left vacant its condition gets depleted and so does its value. Expecting an investor to let that happen to his investments is out of the question. This is what usually happens when the house is abandoned by the loan taker as the house is taken in possession and its value reevaluated and the loan taker is made to pay the remaining amount.
The real estate market is in a very volatile state these days. That is why all lending companies advise borrowers to avoid taking out maximum value of their property. In many cases the value drops which makes them a defaulter.
There are many instances where reverse mortgage loan takers have faced lawsuits or have been forced to evict their homes. This is not because this loan is a trap set to swindle them of their property but in all the cases they did not pay attention to the terms of the loan. This is why the government has now made counseling sessions mandatory for all those who desire to take out a reverse mortgage on their homes.
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