Loans: Tips to Get a Good Deal

Here is some information on different types of loans and different ways to save money.

Reverse Mortgages: These loans let homeowners age 62 or older borrow money from the equity in their homes and not pay anything back until the borrower moves out of the house, sells the property or dies. While there are potential benefits to a reverse mortgage, it also is a complex loan with a variety of costs and risks and it may not be the right product for everyone.

Most reverse mortgages are Home Equity Conversion Mortgages (HECMs), which are part of a program from the U.S. Department of Housing and Urban Development's Federal Housing Administration. The FHA offers two reverse mortgage products — the traditional HECM Standard and the new HECM Saver. The latter features considerably lower upfront costs for people borrowing a smaller loan amount than the HECM Standard allows. Seniors and their families should be aware that the interest charges and other costs on a reverse mortgage could use up much or all of the equity in their home. This could leave little or no value for the borrower or for heirs who typically will have to pay off the loan either by refinancing or selling the house. Current law requires an HECM applicant to first speak with a HUD-approved counselor for guidance.

Auto Loans: Start shopping for a loan before you walk into a dealership or bid on a new car over the internet. Consider getting pre-approved for a loan, so you know your loan options and the likely costs before you buy a car. Also assess the true cost of the financing "specials" offered by the dealership and comparison shop based on the Read More>>