Council on Aging Answers 2017 - 69

COUNCIL ON AGING - SOUTHERN CALIFORNIA

experience with these mortgages before accepting
their advice.

known as "proprietary" products but such products
are not currently available. Uninsured mortgage
products offered by a financial institution or a licensed lender. Again, proprietary products are currently not available.

Council On Aging-Southern California | 714-479-0107 | www.coasc.org Answers Guide 2017

FINANCE & LEGAL

Important Questions to Ask
Before Choosing a Reverse Mortgage
n How much money do I need?
n Is there a way to meet my needs that does not inImportant Things To Do
volve a reverse mortgage?
Before You Make A Decision:
n Will a reverse mortgage make my partner or me
n Decide how long you expect to stay in the home.
ineligible for any "needs-based" public-assistance
n Consult with a HUD-approved reverse mortgage
benefits-now or in the future?
counselor before you apply. A counselor can help
n Does my home qualify for a
you decide whether a reverse
reverse mortgage?
mortgage or some alternative is
Before you decide to
n How much can I borrow
the best choice for you. To find a
through available reverse
pursue a reverse mortgage, HUD-approved HECM counselmortgage products?
or near you, call 1-800-569-4287.
n How much will it cost me in
n Decide if you really need a reyou should carefully
origination fees, closing costs,
verse mortgage. Another type
interest, monthly, or periodic
of loan may be a less costly
fees?
consider your individual
solution. Discuss this with a
n Will I have to sell my home
counselor.
before I die to pay off the recircumstances so you can n Include trusted family memverse mortgage?
ber in the decision-making
n If I die and my partner is still
make
a
wise
decision
about
making process. If inheritance
living in my home, will he or
is an issue, adult children
she have to leave or pay off the
may be willing to help. Shop
the
most
valuable
asset
you
reverse mortgage?
around and compare offerings.
n Will the reverse mortgage
Not all reverse mortgages are
may own-your home.
become due and payable if I
the same: they can vary subrequire long-term care and
stantially in their terms.
move to an assisted-living facility, or to a nursing or
n Determine if your reverse mortgage will affect your
convalescent home?
ability for "needs-based" public assistance benefits.
n Will there be anything left for my partner, my heirs,
or me when the reverse mortgage is fully paid?
Caution
n Are there any fees, costs, or other charges due when
This general information is NOT a substitution for
the reverse mortgage is fully paid? (Regardless of
the
advice of an attorney, accountant, and/or financial
product, prepayment penalties cannot be demanded
planner. Before you decide to pursue a reverse mortwhen the reverse mortgage is partially or fully pregage, you should carefully consider your individual cirpaid.)
cumstances so you can make a wise decision about the
n What are my continuing financial obligations with
most valuable asset you may own-your home. Faca reverse mortgage, such as property maintenance,
property taxes, insurance premiums, and homeown- tors to consider include whether the proposed reverse
mortgage is a recourse or nonrecourse loan, whether
ers' association assessments or fees (as applicable)?
the loan would have a fixed or adjustable interest rate,
and/or the current and projected market value of your
Types of Reverse Mortgages
home.
n FHA-insured mortgage: A Home Equity ConverArticle reprinted from California Department of Consion Mortgage (HECM) product.
n Lender or privately insured mortgages: These are
sumer Affairs, Bureau of Real Estate, www.bre.ca.gov.

http://www.bre.ca.gov http://www.coasc.org

Table of Contents for the Digital Edition of Council on Aging Answers 2017