People who are interested in the idea of the reverse mortgage but who don't qualify for it for some reason (such as being too young) are increasingly turning to reverse mortgage alternatives that are designed to meet their needs. One of the most popular of those alternatives is the REX Reverse Mortgage which offers immediate cash to people for a percentage stake in the equity of the home. There is now a new company called Grander Financial which is offering something similar to the REX Reverse Mortgage.
Both of these loan options offer the same benefits and drawbacks to their customers. They offer the benefit of immediate cash based on the value of the home, something that forms the basis for what people interested in the reverse mortgage are seeking. They also take a percentage of the home equity at the time of the future sale of the home.
The stipulation with Grander Financial is that you can't sell your home for the first three years after you receive the loan. The hope behind the company's rule about this is that the housing market will be out of its slump by then. In that case, home values will be up and Grander will be able to make more money off of th equity of your home.
This type of loan isn't right for everyone but it's something that is worth considering if you can't qualify for a reverse mortgage and need some of the benefits that one would offer to you if you were able to qualify. This new company is a good sign for the industry because it means that there will be competition for the REX reverse mortgage which should result in better terms and conditions for consumers.
Question of the Day: Will we see more and more reverse mortgage alternatives that are similar to the REX reverse mortgage or is this just a temporary trend?
