Find out how home payments are eliminated using a reverse mortgage. Government approved counselors, attorneys and lenders provide accurate answers.
Because of an ailing economy, retirees often struggle to pay ordinary living expenses. The attraction of eliminating monthly home payments and receiving a new line of credit may be irresistible. Eventually, many retired homeowners eventually ask, “Do I need an attorney to get a reverse mortgage?”
Reverse Mortgage Terms
A reverse mortgage is a loan that must be repaid. However, repayment is delayed until an indefinite time in the future. Further, repayment is limited to the value of a home used as collateral even though a line of credit may be available during the lifetime of a borrower. When comparing these unique features to traditional home loan requirements, potential borrowers naturally have questions about the benefits and risks involved.
All reputable lenders provide customers with full disclosure. In addition, certain types of reverse mortgages require that borrowers receive an extensive assortment of consumer disclosures. For example, HECM loans are insured by the FHA. To qualify for a HECM loan, all applicants must receive specific loan disclosures from an FHA approved counselor. Anyone may attend these counseling sessions voluntarily when applying for other types of loans in exchange for a small fee.
Full Disclosure and Appreciation of Responsibilities
The basis for a successful loan transaction is a full understanding of all rights and responsibilities involved. An attorney’s advice may be useful but is not necessary. For less cost, all potential applicants can obtain the same or similar information from government-approved counselors. The best lenders also publish and freely give away information about reverse mortgages.
Anyone who has questions about reverse mortgages, liability and responsibility for repayment should proceed slowly. The best time to resolve all questions is before accepting a loan.
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