What You Need to Know About Reverse Mortgages

What You Need to Know About Reverse Mortgages: From USA.Gov :
"If you are a senior and need to supplement your income, you might be considering a reverse mortgage. A “reverse” mortgage is a loan against your home that you don’t have to pay back for as long as you live there.

When the home is sold, the lenders recover the principal, plus interest, on the loan. The remaining value of the home goes to you or your heirs.

With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay a loan each month.

The Home Equity Conversion Mortgage (HECM) is the only reverse mortgage insured by the federal government. The HECM is a safe alternative resource that can provide you with greater financial security and independence.

In order to qualify for the HECM, you must:

• Be 62 years of age or older
• Own the property outright or have a small mortgage balance
• Occupy the property as your principal residence
• Not be delinquent on any federal debt
• Participate in a consumer information session given by an approved HECM counselor

As with all mortgages, there are costs associated with getting a HECM, including:

• Loan Origination Fee
• Closing Costs (i.e., appraisal, inspection, title search and insurance, etc)
• FHA Mortgage Insurance Premiums
• Servicing Fee
• Interest

To learn more, check out Key Decisions About Reverse Mortgages offered by the AARP.
"