Ask Terry Questions Taking out a Reverse Mortgage

Taking out a Reverse Mortgage

By Terry Savage on August 21, 2022 | Housing / Real Estate

Hi Terry, I’m considering a Reverse Mortgage. I’ve been doing my reading and evaluating. I’ll be meeting with an agent soon. Are there any red flags I should be aware of?
Any recommendations of who else to meet with to discuss Reverse Mortgages?
I’m a 79 year old widow. I’ve been widowed for 5 years. My home has been paid off for years. I have no intentions of moving.
Thank you for any answers you may have.

Terry Says

You seem to meet the general requirements for a RM — planning to stay in your home for years,and with enough income/assets to keep paying property taxes and insurance. I’m a fan of RMs and even did one for my dad years ago.
You’ll be required by law to have “independent counseling” likely by AARP or another housing non-profit before doing a RM.
You asked about doing a comparison. The biggest thing to compare is FEES — which may vary greatly from lender to lender. Learn about them here:
https://www.aag.com/reverse-mortgage/loan-costs/#:~:text=%20What%20Are%20The%20Reverse%20Mortgage%20Fees%3F%20,services%20required%20to%20complete%20your%20reverse…%20More%20

Right now, with home values high is a good time to do a RM. Don’t worry so much about the interest rates — as that is added to the amount of your loan, and only becomes an issue if you sell or for your heirs if you die. But if you live there until you die, you or your heirs can never owe more than the house is worth. And you can never be forced out for “running out of equity”.

To do fee comparisons, you should make your own spreadsheet with the categories of costs listed in the article above. Then go to www.ReverseMortgage.org to search for other lenders near you and find out what they charge in fees.

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