Don’t Lose Your Home to a Foreclosure: 3 Reverse Loans Scams to Avoid
Deciding on taking a reverse loan is only half the battle. Once you set your sights on this loan, the next thing on your to-do list should be about choosing the right reverse mortgage company. With the risk of scams and unscrupulous lenders, be sure to watch out for:
Aggressive sales pitches
If something seems too good to be true, it probably is. So, if a mortgage broker or lender reaches out to you and proves a bit too aggressive, encouraging you to take out a loan without even checking if it’s appropriate for you, decline firmly but politely, and walk away. Don’t let yourself be pressured by pushy sales tactics into getting a loan, especially one like this, without properly thinking every angle through.
The New York Times reported that some dishonest mortgage brokers would market the loans as free money to homeowners. It’s not. Reverse loans allow you to use up your home equity, trading it for cash. But with fees tied to certain conditions and a particular set of risks, these loans are anything but free.
Undermining the risks
If the broker or lending company makes light of the risk that you might lose your home to a foreclosure, that’s a glowing red flag right there. Know the terms and the conditions before you say yes to this agreement. Failure to gain full knowledge of the facts could doom any chances of you getting back your home.
Finding the right lending company can make a world of difference. So be wary of these traits. If you see the lending company demonstrate any of these behaviors, do yourself a favor and walk away. Keep looking until you find a trustworthy lending company to help you thoroughly understand the risks and gains you get with this complex financial tool.