Your reverse mortgage checklist

Your financial situation may not be the same today as it was last year or even last month. So if you are at least 62 years old and are trying to plan for retirement, use the following checklist when considering reverse mortgages.

1. Take a comprehensive look at your entire financial situation before making any big decisions. That means scrutinizing your budget to see where you may be able to change spending habits to keep more of your income. You can get help with this from a financial planner who specializes in retirement issues.
2. Set up an appointment with a reverse mortgage counselor if you want to convert home equity to cash. The majority of reverse mortgages in the U.S. are through the Home Equity Conversion Mortgage (HECM) program, so counseling from an agency approved by the Department of Housing and Urban Development (HUD) is required. The counselors must pass an HECM exam approved by HUD.
3. Make sure you’ve exhausted all other alternatives to borrowing money. There may be programs in your community aimed at helping senior citizens with housing costs, food, home repairs and other services. Ask around at your local center on aging, community centers, churches and other organizations.
4. Decide ahead of time what reverse mortgage proceeds will be used for. Many retirees use the money to pay for property taxes, medical care, prescriptions and home repairs, among other things. There aren’t too many restrictions on what the money can be used for, and you can even purchase another home to live in as long as it will be your principal residence.

Reverse mortgage guidelines

Get all the facts about reverse mortgage guidelines before filling out an application. Too many people have made the mistake of thinking a reverse loan would solve all their problems without really investigating whether or not borrowing money was right for their situation.

This entry was posted on Wednesday, March 16th, 2011 at 9:20 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.