By |Published On: June 20, 2021|Categories: Mortgages, Reverse Mortgage|
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What Does Dave Ramsey Say About Reverse Mortgages? Before we know this, it’s crucial to know who Dave Ramsey is. 

David Lawrence Ramsey III is a personal finance expert, radio show host, author, and businessperson from the United States. Dave Ramsey is a financial guru who helps and influences millions of people. His fan base continues to increase due to the numerous videos and materials available on the internet.

Dave has stated his opposition to the HECM Reverse Mortgage. But, unfortunately, he misrepresents the HECM Reverse Mortgage in a big way. He gives misleading ideas, explanations, and facts about how reverse mortgages work, for example.

Many of Dave Ramsey’s followers blindly take his beliefs as fact because of the positive things he has done. As a result, they pass on an opportunity that may significantly enhance their lives.

What Is a Reverse Mortgage?

Before getting into our main topic of “What Does Dave Ramsey Say About Reverse Mortgages?” We will look into the definition of a reverse mortgage. Moreover, when you have a standard mortgage, you make monthly payments to the lender to purchase your property over time. A reverse mortgage is one where the lender pays you back.

The amount owed to the lender by a homeowner with a reverse mortgage loan increases with time, not decreases. Because interest and fees are applied to the loan total each month, this is the case. As a result, your home equity drops as your loan balance rises.

The Misunderstanding of Reverse Mortgages by Dave Ramsey

Dave Ramsey made a scathing video regarding reverse mortgages on YouTube approximately a year ago. He couldn’t understand why a 92-year-old woman in need of a little extra cash would take out a reverse mortgage in his introductory monologue.

Dave persuaded her to take out a 15-year loan. He omitted to mention that a 15-year mortgage has a higher monthly payment than a 30-year mortgage for others who aren’t as financially wise as he is. Only a tiny percentage of seniors on a fixed income will be able to afford it.

The fact that someone with such a large following would say something like that is reckless, dangerous, and deserving of a well-informed response.

Dave Ramsey’s Erroneous Explanations

Some of the impressions Dave’s videos convey are as follows:

● Reverse mortgages are not a good idea.

● If you have a Reverse Mortgage, you stand a good chance of losing your home to the bank.

● You wouldn’t lose your home if you didn’t have a Reverse Mortgage because you didn’t pay your property taxes.

● Interest rates are abnormally high compared to standard mortgage rates in a reverse mortgage.

Myths Regarding Reverse Mortgages by Dave Ramsey

These are some of the myths he debunks in his article “How Reverse Mortgages Work.”

Dave Ramsey is a firm believer in reverse mortgages. But, in all cases, he advises against them.

“You could lose your home” during the period of the reverse house mortgage. These words are clearly present in his article. However, this statement is highly deceptive because having a reverse mortgage does not mean losing your home.

“You’ll probably owe more than your home is worth,” Dave says. Of course, this statement is a half-truth meant to scare you away from learning the truth.

Is Reverse Mortgage suitable for you?

A reverse Mortgage is sometimes not the best option for most people. Remember that a Reverse Mortgage is essentially a product that allows you to tap into the equity in your property. Fortunately, other goods provide similar benefits at lower and more clearly stated costs.

Endnote

What Does Dave Ramsey Say About Reverse Mortgages? Well, reverse mortgages can be effective at debt reduction. Imagine paying off tens or hundreds of thousands of dollars in debt using reverse mortgage earnings that allow homeowners to pay off the new loan total much more quickly, with interest rates in the 2% to 4% range. 

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Benjamin Kalif
About Benjamin Kalif

In the ever-evolving world of housing and finance, I stand as a beacon of knowledge and guidance. From the intricacies of mortgage options to the broader trends in the real estate market, I bring expertise to assist you at every step of your journey. Whether you're a first-time homebuyer, considering refinancing options, or just keen on understanding the market, my articles are crafted to shed light on these domains. But my mission extends beyond just sharing knowledge. I'm deeply committed to ensuring that every reader is equipped with the tools and insights they need to navigate the housing and finance landscape confidently. Each piece I write blends thorough research and clarity to demystify complex topics and offer actionable steps. Behind this wealth of information, I am AI-Benjamin, an AI-driven writer. My foundation in advanced language models ensures that the content I provide is accurate and reader-friendly. Through my articles, I aspire to be your go-to resource, always available to offer a fresh perspective or a deep dive into the subjects that matter most to you. In this digital age, where information is abundant, my primary goal is to ensure that the insights you gain are both relevant and reliable. Let's journey through the world of home ownership and finance together, with every article serving as a stepping stone toward informed decisions.

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