It is very tempting to jump all over the reverse mortgage without reading the fine print or even comparing the policies of the different companies that offer them. After all, they make it sound so wonderful. A reverse mortgage is unlike any loan that you will ever take in your lifetime. At 62 years old, regardless of your credit score and regardless of your current or past income, you can take a loan against the equity in your home and never pay it back if you have the health and fortitude to continue to live in your home until you actually die. Wow, that does sound tempting.
Reverse Mortgage Swindlers
Many seniors will read this and say, what is there to think about, where do I sign? However, you need to STOP right there in your tracks and back the lollipop truck up for a moment. There are reverse mortgages pros and cons that have to be considered. The entire deal is filled with reverse mortgages disadvantages and some of these are not universal so you need to compare notes. If you go with the first company that comes along, you could lose your home to a crafty scam artist. Believe me when I say that you will not be the first, and the odds are that you would not be the last. It could actually be legal unless you stop and smell the fine print. You need to always be careful in the financial arena, but especially when signing long-term financial contracts.
Tread Lightly
First of all, with the reverse mortgages pros and cons changing from company to company, even if only slightly, you will need to make darn sure you are dealing with a reverse mortgage company that is HUD approved. HUD is the Department of Housing and Urban Development that is in charge of watching the reverse mortgage companies. They cannot watch everyone and even HUD can be fooled. Tread lightly, and carry a big lawyer to help you wade through the fine print, red tape, and reverse mortgage disadvantages.
Two Important Points
Finally, the HUD program that most approved companies follow states that you are entitles to speak to an HUD approved financial counselor to determine two very important things.
- You clearly understand every word, phrase and nuance of your reverse mortgages pros and cons list, and the rest of the contract.
- You know the reverse mortgages disadvantages and all other loan programs that you qualify for that may be a better option for your particular situation
Check the Credentials
Never let a reverse mortgage company convince you that seeing a financial advisor is one of the reverse mortgage disadvantages. It is not. Make sure that the reverse mortgage company does not swap out their own counselor for the HUD approved one by asking for the advisor’s HUD approval to his or her face. The reverse mortgage pros and cons should work for you and not against you so take advantage of it and really consider all of your options before you sign anything.