Home | Ask Your Question | Mortgage Glossary
Find me a lender for:  
Is the Inverse Mortgage a Scam? New Program Promises Mortgage Payoff inside of 5 Years By Mark Barnes

If a mortgage could be paid off in five years or less, without it costing homeowners an extra cent, why wouldnt every homeowner in America be doing it? Because they dont know, or because theyre too wise? Although the former may be the case for many, I certainly hope the latter is the answer for most.

A real estate finance consultant company, who shall remain nameless here, claims it has the secret to paying off your mortgage in five years or less, without you paying any more on your monthly payment or adding to the principal mortgage of your real estate loan. They call it an inverse mortgage.

Now, this company, which is not a mortgage brokerage or a bank, claims that all you have to do is pay your mortgage payment every three weeks, instead of every four. In addition to this one tiny change, youll need to go to work for the company, recruiting other people to do the same. Of course, they say this is not a pyramid structure, although the way you cut into your mortgage and build wealth is by banking some of each payment that comes in for everyone you recruit, after the initial three. Incidentally, this company will take one of your payments at the end of the year for hiring you to recruit more people into their program.

Hmm, not a pyramid scheme or multi-level marketing? I dont claim to be an expert in these areas, but I certainly know the basic structure, and you probably do too. Doesnt a program requiring you to get others to buy something with the idea of you receiving a residual benefit from each recruit sound a lot like multi-level marketing? It does to me.

I may be a skeptic, but there are a few basic problems with the inverse mortgage and with this real estate finance program.

1. This company has been around for less than one year, and after some exhaustive research, I cant find one person who has ever actually made money or cut into their mortgage as quickly as the company says one can.

2. In the last 20 years, there hasnt been a revolutionary idea for reducing your mortgage, without paying more or without doing something like a bi-weekly mortgage (a completely legitimate, if unnecessary, approach to mortgage reduction). Why is it that this new company not even mortgage people has suddenly come up with something that true experts with 50 or more years of experience in the industry have not?

3. This one is the most alarming reason to be skeptical. In addition to the strange notion of recruiting people to take part in this program, the sponsoring company wants you to turn over your bank account information, so it can debit your account monthly to supposedly pay your mortgage.

So, is the inverse mortgage a scam? I cant say unequivocally that it is, because I dont have any true evidence to say so. The many years of experience in mortgage and investment real estate that I do have, though, tell me to beware of any program that looks too good to be true. This one does.


Mark Barnes is an investment real estate and real estate finance expert. Get his free mortgage finance course at http://www.winningthemortgagegame.com. Mark is also the author of the new novel, The League, a shocking, sports-related conspiracy. Learn more about his suspense thriller at http://www.sportsnovels.com.




See Also:

Mortgage Glossary - A Glossary of Mortgage Terms You Should Know
Acceleration Clause A clause in a mortgage defining that the entire outstanding balance can become due and payable should mortgage default occur. If the entire balance is not paid, the property will be foreclosed.Adjustable Rate Mortgage (ARM) Mortgage with interest rates that may be adjusted by ... more...

Types of Loans
Loan Types What types of loans are available to me? There are many different types of mortgage offered to consumers. Some of the most popular mortgage broker are the FHA Home Loan (Federal Housing Administration) and the VA Loan . Because the FHA mortgage and VA mortgage are guaranteed by the ... more...

Online Mortgage in UK - Introducing the Best Mortgage Plan Across UK
Add the term online and it will open for you an exhaustive assortment of opportunities. Add online to mortgage and it will have the same effect. So many people want to get mortgage programme and get with it fast. The online mortgage in UK indisputably takes lesser time and simplifies the entire ... more...

Lowest Mortgage Rates UK Lowering the Cost of Mortgage
Mortgage is the most widespread industry that offered to loan borrowers with real estate as collateral. Mortgage has so many innovations and opportunities that a loan borrower can exploit them for their own benefit. You must have heard and read it elsewhere that mortgage rates are at an all time ... more...


More on mortgage...

Search More Info On:

  • Mortgage
  • Mortgage Company
  • Mortgage For You
  • Mortgage Program
  • Mortgage Payment
  • Real Estate
  •  

    Shop For Your Mortgage Now!
    Shop For Your Mortgage Now!

    You'll be re-directed to Top-Lenders.com

    Want to Know Your Rate?
    Get Customized Mortgage Quote Instantly

     
    ExplainingMortgages © 2005 - 2009