Reverse Loan Checklist

Choosing to borrow a reverse mortgage is a big step. It’s important to make sure that if you plan to tap the equity in your home, you’ve done whatever you can to make the process as smooth as possible. Use the following checklist as a guide.

1. Get as much information as possible about reverse mortgage guidelines. Research reverse loans online and by reading books and magazines. Some communities and organizations offer free seminars about reverse mortgages so keep you eyes open for events near you.
2. After you’ve gathered as much information as possible, make an appointment with a reverse mortgage counselor. The Department of Housing and Urban Development has a list of housing counselors that are approved to discuss Home Equity Conversion Mortgages (HECMs). HUD-approved counselors are required to pass a HECM exam to be licensed to discuss reverse loans.
3. Run the numbers carefully to determine if a reverse loan can really help your situation. Getting a reverse home mortgage should not be the first attempt to improve your financial situation. While borrowing money can supplement your income, it’s crucial to have a counselor discuss alternatives to reverse mortgages.
4. Shop around and compare reverse mortgage lenders. Work with lenders who have been in business a while and have a good reputation in the community. Avoid fly-by-night operations that seem more interested in taking your money than helping to find the right solution for your situation. Also avoid reverse mortgage lenders who try to pressure you into buying other financial products you don’t want.
5. Make sure you understand all the fees involved if you do decide to borrow money. Determine if it makes more sense to take the cash payout in a lump sum, through installments, or as a line of credit.

Borrowing money with a reverse mortgage can potentially affect other family members. If necessary, discuss your situation with any reverse mortgage heirs so that they are familiar with your estate plan.

This entry was posted on Monday, April 19th, 2010 at 2:26 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.