What Is A Reverse Mortgage? - part 2

by Barry McDonald

What Questions Should I Ask if I Decide to Shop For a Reverse Mortgage? Use this list of shopping questions:
How much money do I need?
Is there a way to meet my needs that does not involve getting a Reverse Mortgage?
Will a Reverse Mortgage make my partner or me ineligible for any government benefits, currently or in the future?
Do I qualify for this Reverse Mortgage?
How much can I borrow through a particular Reverse Mortgage product?
How much will it cost me in fees and interest to borrow this money even if I don't have any "out of pocket" expenses?
Will I have to sell my house before I die to pay off this Reverse Mortgage?
What happens if I die, and my partner is still alive and living in the home; will he or she have to leave or pay the loan off?
What happens if I have to go to a nursing home; will the loan become due and payable?
What will I or my heirs have left after the loan is paid off?
Are there any early-repayment penalties? What are my obligations under the Reverse Mortgage, such as home maintenance, property taxes and insurance?

Reverse Mortgage Essentials
Four important things you should do before getting a Reverse Mortgage:
1. Determine if you really need a Reverse Mortgage or if another type of loan would be better for you. Depending upon your needs and your financial situation, you may be able to meet your goals with another, less costly financial solution than that provided by a Reverse Mortgage.

2. See a HUD approved Reverse Mortgage counselor-free of charge - to help you decide if a Reverse Mortgage is for you, or to help you choose among the different types of Reverse Mortgages.

3. Shop around and compare! Not all Reverse Mortgages are created equal. They vary substantially in how much cash you can get, what they cost, and other features.

4. Consider whether a Reverse Mortgage might make you ineligible for any public benefits you now receive or may be eligible to receive in the future. For example, if you currently receive or expect to be eligible for any "need based" benefits such as Medicaid, Medi-Cal, or Supplemental Social Security Income (SSI), Reverse Mortgage payments will have to be structured so that monthly payments will be spent within the month they are received. If not, such payments will be considered "income," and may make you ineligible for public benefits. You should contact your benefits provider to ask about how a Reverse Mortgage may affect your eligibility. The ordinary cautions when applying for a loan still apply: Don't sign anything you don't understand. Read everything before you sign. Never sign a loan application with blank spaces. If it sounds too good to be true, it probably is!

Copyright (c) Barry McDonald

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