Reverse mortgages are getting popular and more people are asking questions. This article answers the question; under what conditions can I cancel a reverse mortgage purchase?
Brief Overview of reverse mortgage
Reverse mortgages are unique forms of mortgage loans that help seniors to use their home equity to access funds or cash without having to move out or sell the home. With this type of mortgage seniors retain the possession and financial obligations of the homes. To qualify for reverse mortgage, seniors must be at least 62 years of age and must own and reside in their own homes. Seniors who have paid off a considerable part of their mortgage can also get the loan.
Under What Conditions Can I Cancel A Reverse Mortgage Purchase?
People who qualify and receive reverse mortgage loans can opt to cancel the mortgage for any reason they choose. By law they are permitted to cancel the reverse mortgage contract as long as it is within the permitted time frame. The permissible time frame for cancellation of reverse mortgages is three business days after closing and is referred to as the “cooling out period”. Business days include Saturdays but exclude Sundays and legal public holidays.
How to Cancel A Reverse Mortgage
Reverse mortgages cannot be canceled via telephone or in person. If you want to cancel your reverse mortgage you need to do so by writing. Collect a cancellation form from your lender and file it before the end of the third business day. You can also send a written letter via hand, mail or fax before midnight of the third business day. Be sure to state clearly your intention to cancel and quote any loan number if necessary.
Extra information
Remember that the answer to the question under what conditions can I cancel a reverse mortgage purchase is that there are no specific conditions. You can cancel for any reason as long as it is within the “cooling out period”. Ask for a return receipt from your lender. Lenders are required to repay all fees that have been paid by the seniors within 20 days of cancellation. If you suspect any form of fraudulent practice be sure to report to the relevant authority.
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