In considering whether or not to get a reverse mortgage, you are the only one who can decide whether a reverse mortgage is right for you. In making this important decision, answers to the questions that follow may prove helpful in your decision making.
Have I evaluated my other options?
There is a natural tendency to want to stay in our own homes. Before getting a reverse mortgage, however, you may want to evaluate other housing options, such as buying a less expensive home or moving to an apartment or assisted living facility. This is especially important if there is any possibility that you may want to move in the near term. Since the upfront costs associated with a reverse mortgage, can be significant, reverse mortgages may be expensive if repaid within a few years of closing, so carefully consider your other housing options, together with possible future plans to relocate.
Do I want to involve someone else in my decision?
Do you have a trusted advisor or friend whose opinion you value? If so, you may want to ask this person for his or her thoughts on whether a reverse mortgage would be right for you in your situation. You also need to decide whether to involve your children or other heirs in the decision-making process.
What other resources are available to me?
As noted earlier, to be eligible for an FHA-insured Home Equity Conversion Mortgage (HECM), you must discuss the reverse mortgage with a HUD-approved counselor. The counseling service is free and can prove helpful in your decision process. If you are considering a proprietary reverse mortgage, you may want to consider paying a counseling agency for this service.
In addition, there are several online resources that may prove helpful to you:
U.S. Department of Housing & Urban Development: Top 10 frequently asked questions. Information about HECM loans, together with a listing of FHA-approved HECM lenders and HUD-approved reverse mortgage counselors.
NRMLA: Reverse mortgage information from an association of reverse mortgage lenders who have signed a code of conduct.
You may ask questions in the comments or contact me privately here:
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