Finance Banking

How Motgage Banking Failed

Published at 07/12/2011 22:27:27

 Tough financial situations could lead to options like reverse banking mortgage. These methods are temporary solutions for individuals with tough financial situations. Tough situations mean tougher methods of solving financial crisis. Properties such as home being set as collateral for loan are very risky procedures for anyone to venture. Looking for money to pay up some bills could be a very daunting task these days, but losing a home is certainly the worst case that could occur with these banking methods.

 Reverse mortgage could basically pay up some of your bills and expenses such medical and tuition fees. However, this money is definitely not free. You have to basically pay everything that you have loaned plus the additional interest rates. Banks or money lenders are in these businesses to earn money and such is the case with banking mortgage. Business is always business with these people even though they talk sensitively in front of you. These lenders would offer more money to be lent than the exact amount that the client needs. More money being borrowed means more money gained by them through your interest payments.


The whole procedure of this banking and loaning is very costly and expensive. There are several expenses such as application fees, credit reports and insurances. Aside from the interest rates you would also pay up several monthly expenses. You could also live to the comfort of your equity, but you will also have to pay several expenses such as property taxes and even maintenance for your home.


The sales personnel in such field would only think of their personal profits. These individuals are good talkers and they certainly are superb in convincing people to purchase their products. They would virtually say anything to achieve the sale and oftentimes they would skip several details that could blemish their respective merchandises. Some would entice their clients with lower interest rates at the beginning of the program. These rates would eventually increase in a short amount of time without the knowledge of the client. A four percent interest rate could virtually become eight percent in a year or two. Such cases are some of the reasons these banking methods are set for failure.

 Majority of the sales personnel in this field are not licensed and are not well trained. They are very similar to the used cars sales agent. They only think of the personal gains and they do not think of the prosperity of their clients. They are not as professional as the real estate agents are.


Mortgage banking requires higher value rates of equity in order for an individual to qualify for such. These money lenders would not offer the full amount of your home to be loaned. They would certainly offer lesser amounts so that it could be advantageous to them. Such situation could enable them to create spaces for interest to be added to the basic amount of the loan.


Looking for money could become a very daunting task these days, but still there are other ways and methods of finding such. Banking mortgage is just a temporary solution that could be disastrous for anyone in the near future.

Tips and comments:

 Before deciding to submit an application for banking mortgage, it is advisable to evaluate both the benefits and the damages it can produce. It is also best to make sure that one can afford to pay back the loan and borrow only what is needed at the moment.