You’ve probably heard a lot about how reverse mortgages can benefit seniors. But if you’re still on the fence about going this route, here are some frequently asked questions to help determine if a reverse mortgage is a smart move.

Q. I’m only 62. Is a reverse mortgage loan a good idea at my age?
A. Reverse mortgages are available to people who are 62 and up. But generally, the older you are, the more money a mortgage lender will be willing to lend you. So if you don’t really need the money right now, it may make sense to hold off on getting a reverse mortgage for several more years. Also, the younger you are when you receive a reverse mortgage, the more likely you’ll outlive the loan and need to find another source of income.

Q. Will I have to move if I outlive the mortgage loan?
A. No, you will not have to move. You also will not have to repay the loan as long as you stay current on your taxes and insurance.

Q. Will I be able to leave my home to my children?
A. Yes, you can leave your home to your children and they will not be liable for repaying your mortgage loan out of their own pockets. Your heirs can apply for a conventional mortgage to pay off the reverse mortgage. If there is still equity in the home, your kids could also choose to sell the home to pay off your loan.

Q. What kind of fees will I pay to get a reverse mortgage?
A. Reverse mortgages are generally known for their high fees. Among the costs you’ll probably pay are an origination fee to cover the lender’s operating expenses, an appraisal fee, and other closing costs. FHA’s reverse mortgage program also requires a mortgage insurance premium (MIP) to guarantee that if your loan servicer goes out of business, the government will make sure you still have access to your loan funds. MIP also guarantees that you’ll never owe more than the value of your home when the reverse mortgage has to be repaid.

Use this reverse mortgage calculator to determine how much you might receive when applying for a loan.

This entry was posted on Thursday, May 21st, 2009 at 3:28 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.