There are many considerations reverse mortgage borrowers should take to heart as they think about getting a Home Equity Conversion Mortgage. In a recent article, Forbes offers five key questions all consumers should ask themselves before following through with a reverse mortgage.
“Any time you see stars advertising easy money on cable television, you need to ask some critical questions before signing on the dotted line,” the article states. “While a reverse mortgage might be appropriate for some people, the product comes with significant risks and high costs.”
The article encourages readers to do extensive research before taking out a reverse mortgage, first asking themselves if they are willing to sell their home and move into a cheaper property.
“If you are able to sell your home and pay cash for a much smaller, less expensive property with the proceeds, you will be able to eliminate most of the costs associated with a reverse mortgage, which can be significant,” the article states.
Thinking about your spouse is another important consideration prospective borrowers should weigh before moving forward with the loan.
“Because older homeowners are often eligible to borrower a greater percentage of their equity than younger borrowers, some married couples only take out a loan in the name of the older spouse,” the article states, warning that this could potentially create difficulties for the surviving spouse’s ability to remain in the home. “Make sure you have a plan for the surviving spouse.”
Read the full Forbes article to view the other top questions consumers should consider before getting a reverse mortgage.
Written by Jason Oliva