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SUMMARY
In this video, Dave rants about reverse mortgages and the risks involved with them. He reads from a Washington Post article (linked below) that discusses a 92-year-old woman in Washington D.C. who has a failing reverse mortgage and is facing foreclosure on her home. This is a problem that an increasing number of seniors in America are facing.
Reverse Mortgages Explained:
What is a reverse mortgage? A reverse mortgage is a federally owned mortgage that allows cash-strapped seniors to borrow against the equity their house has built up over the decades.
How does a reverse mortgage work? A reverse mortgage is just like a regular mortgage, but instead of making payments on your home’s principal, you take payments from the equity you’ve built.
What are the disadvantages of reverse mortgages? There are three main reverse mortgage disadvantages: you’re giving away your net worth, you’ll have extra costs on everything, and you’ll likely end up owing more than your home is worth—which means you could eventually lose your home altogether.
Should I get a reverse mortgage? Dave warns that you should never get a reverse mortgage. With interest rates doubled and foreclosure rates constantly rising, it’s never a good idea to get a reverse mortgage.
RESOURCES
Learn more about reverse mortgages: https://www.daveramsey.com/blog/how-reverse-mortgages-work
Want to hear more of what Dave has to say? Listen to a caller ask Dave about reverse mortgages: https://www.youtube.com/watch?v=r65XTx2lxFM
Read the Washington Post article here: https://www.washingtonpost.com/business/economy/more-seniors-are-taking-loans-against-their-homes–and-its-costing-them/2017/08/25/5f154072-883a-11e7-961d-2f373b3977ee_story.html?utm_term=.6aff35ae2697
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