A Family Decision – A Reverse Mortgage
Consumers need to really understand all of the costs, terms and conditions before applying for a reverse mortgage, and that the ultimate decision made by a homeowner, over the age of 62, should consult with a prospective borrower’s family member or another trusted advisors.
An applicant should take a peak at the requirements of a reverse mortgage and see if they qualify. But also have a conversation with the family as a unit to determine if it is the right move.
This kind of transaction can have an impact on the family in terms of potential inheritance in the future. Having children or other family members who are involved with the estate should maintain knowledge of the loan’s key features.
Everybody needs to understand that you’re taking out the equity in the home.
Heirs or other surviving family members are going to have to pay back the amount of equity that has been taken out of the house along with any interest charges that may have accumulated during the time that the home owner was living in the home. The entire family needs to know about all the moving parts.
Prospective borrowers should also be aware of the upfront costs and fees that accompany a reverse mortgage.
“If you do move forward with a reverse mortgage, you want to understand what all of those fees are going to be, what you’re going to have to pay and whether it’s a good fit for your family.
Any stakeholders in a decision relating to the financial affairs of a family member would be well-served by “reading the fine print” with any new transaction, and what applies to a reverse mortgage as well.
Read about things like origination fees, appraisal fees, things like you are going to have to pay.
And if you get a reverse mortgage, you are also going to have to keep up with the insurance costs, the taxes on the property, and you are required to maintain the property in a condition that keeps its value where it needs to be to support the reverse mortgage.