Reverse Mortgage Information for Consumers
The Commonwealth of Massachusetts has launched a new website to help consumers make wise choices about Reverse Mortgages. The site explains that a "reverse mortgage loan is a special type of mortgage loan for seniors(generally age 62 and older) that pays a homeowner loan proceeds drawnfrom accumulated home equity. Unlike a traditional home equity loan orsecond mortgage loan, no repayment is required until the borrower(s) nolonger use their home as their principal residence."
The site outlines the pros and cons of obtaining a reverse mortgage, explains the fees and ramifications of obtaining a reverse mortgage and has a list of the approved reverse mortgage lenders in Massachusetts.
Especially important is the section on red flags to watch out for:
- Sales tactics involving the required or suggested purchase ofannuities, other investments, long term care insurance or other typesof insurance policies with proceeds from the loan.
- Sales tactics involving contractors looking for proceeds to pay for home repairs.
- Beingadvised to transfer title to the property out of you or your spouse'sname to qualify for the loan. Understand the legal consequences oftitle transfers.
- Being advised to have loan proceeds payable to third parties, and not you as the borrower(s).
- Estateplanning services that offer to refer you to a lender for a fee orpercentage of the loan. You can obtain information on lenders from theDivision of Banks and HUD at no cost.