How to Explore Reverse Mortgages
In 1988, the Federal Housing Administration launched a pilot project called the Home Equity Conversion Mortgage Insurance Demonstration that was adopted by the U.S. Department of Housing and Urban Development (HUD). Today, it is known as a reverse mortgage. This type of mortgage is geared to homeowners age 62 and older and enables seniors to exchange home equity for a lump sum distribution or scheduled payments from the lender. Reverse mortgages are similar to home equity lines of credit. However, the borrower does not make periodic payments.
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Instructions
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Visit your mortgage lender to inquire about reverse mortgage availability and options. The lender might provide information on a CD that you can examine at home.
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Access the FDIC website to learn how the reverse mortgage evolved. You can also gain insight concerning consumer issues and review how this mortgage compares to other home loans.
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Talk to a HUD-sponsored housing counselor for advice about reverse mortgages. For counselors in your area, call 800-569-4287 or search online at the HUD website. A counseling session may cost approximately $125. However, a counseling agency cannot charge a fee if the client has an income less than 150 percent of the current federal poverty level.
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