As with any other major financial decision, you should carefully consider all the facts and get expert advice before choosing a Reverse Mortgage. Fortunately, a Reverse Mortgage has built-in safeguards to help you determine if it is right for you.
Before your Reverse Mortgage can begin processing, you must talk with an independent counselor approved by the U.S. Department of Housing and Urban Development (HUD). They provide objective information about Reverse Mortgages, answer your questions, and make sure you understand the process. This can often be conducted over the telephone for your convenience.
If your loan has an adjustable interest rate, there is a limit on how much the rate may change during a specified time period. These interest rate caps ensure your interest rate will not increase beyond a certain level.
All estimated loan costs and fees must be disclosed including the Total Annual Loan Cost (TALC), so you know exactly what you are paying to get the Reverse Mortgage. The Reverse Mortgage contract has a “Right of Rescission,” giving you the right to cancel the loan within three business days of closing.
Many seniors want to include family members in their Reverse Mortgage decisions. Family members who are not familiar with Reverse Mortgages may be concerned, since they may have misconceptions about this financial toll. Your family is invited to participate in the application process, if you so desire. We will be happy to explain how a Reverse Mortgage works and answer any questions they may have before proceeding.
To determine if a Reverse Mortgage is right for you, evaluate your finances and goals; current budget, future finances, lifestyle needs and desires, personal goals, how long you plan to live in your home, and how important it is to you to leave home equity to your heirs.
The timing of your decision is important, since the amount of your loan will be based on the value of your home, your age, and other factors. It is usually best to consult a trusted financial advisor and a licensed Reverse Mortgage loan advisor to help you determine the best option for you.