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Reverse Mortgage ‘Danger Signals’
With Reverse Mortgages growing in
popularity, the misuse of these loans also grows. Be on the lookout for these
‘Danger Signals’:
- The lender is not licensed or doesn’t have a plan approved by the Massachusetts Division of
Banks
- You’re getting counseling only from the lender
- Counseling is done just before or at the closing
- You’re being discouraged from talking with family and friends about the loan
- You’re being pressured to use equity in your home to buy something with the proceeds
- You’re asked for a large deposit upon applying
- You’re told a large deposit will speed up processing
- You’re pressured to make a quick decision
- You’re offered a discount to sign by a certain date
- Insurance premiums and other costs are not explained clearly
- Your children, relatives or others are pressuring you to get a loan so they can use
the money. Even if they promise to pay you back, the loan puts your future
security at risk
Other Issues of Importance when considering the acquisition of an equity conversion loan:
- Ability to meet obligations to pay hazard insurance and property taxes and to maintain the home in good condition.
- Sufficient income (from all sources, including the reverse mortgage) to meet basic living and housing costs long-term, as well as account for inflation.
- Awareness that future developments such as health care issues and home repair costs may jeopardize the ability to remain in the home long-term, as well as impacting the ability to have critical equity reserves for estate planning or transition to another setting (e.g., assisted care facility).
Beware of signing away your home.
Call H.O.M.E. for more information...800-583-5337
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