The Reverse Mortgage... What The Heck Is It Anyway? - part 2

by Don Adams

The costs associated with a reverse mortgage are similar to those with a conventional mortgage. This includes the origination fee, appraisal, inspection fees, title search and policy, mortgage insurance and other normal closing costs... all of which can be financed as part of the reverse mortgage loan.

All reverse mortagages are non-recourse loans. This means you can never owe (be obligated for) more than the value of your home regardless of the loan balance. The title remains in your name and the lender is only entitled to the amount of the loan balance.

The proceeds from a reverse mortgage do not affect your social security or Medicare benefits.

If you still have a balance on your conventional loan, it must be paid off as part of the application process for the reverse mortgage. This of course would eliminate your current monthly payment.

The most well-known and widely available reverse mortgage is the federally-insured Home Equity Conversion Mortgage (HECM). This loan is back by the U.S. Department of Housing and Urban Development and can be used for any purpose. It is generally offered by mortgage companies or banks.

Copyright (c) Don Adams

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