Reverse Mortgage

Page 1

Get the Facts Before Cashing In On Your Home's Equity

Some older Americans are turning to reverse mortgages to help finance a home improvement project, pay off a current mortgage, supplement their retirement income, or pay for healthcare expenses. Reverse mortgages allow older homeowners to convert part of the equity in their homes into cash without having to sell their homes or take on additional monthly bills.

In a regular mortgage, you make monthly payments to the lender. But in a reverse mortgage, you receive money from the lender and generally don't have to pay it back for as long as you live in your home. Instead, the loan must be repaid when you die, sell your home, or no longer live there as your principal residence. Reverse mortgages can help homeowners who are house rich but cash poor stay in their homes and still meet their financial obligations.

For most reverse mortgages:

1) You must be at least 62 and live in your home.
2) They are, generally, tax free.
3) They have no income restrictions.
4) Generally they do not affect Social Security or Medicare benefits.
5) You retain the title to your home and do not have to make monthly repayments.

Page 2 Three Basic Types of Reverse Mortgages
Page 3 If you are considering a reverse mortgage, Be Aware

References:
www.ftc.gov/bcp/conline/pubs/homes/rms.htm

Federal Laws
Major laws that govern financial institutions and protect individuals in their financial dealings

Organizations

Fannie Mae
Freddie Mac
Ginnie Mae
Nellie Mae
Sallie Mae

Consumer Info

Credit Bureau
Credit Report
Directory of Federal Agencies
Federal Trade Commission (FTC)
Identity Theft
Predatory Lending
Repair Your Bad Credit
Truth in Lending Act
Borrowers Beware

Miscellaneous

Private Mortgage Insurance (PMI)
Prepayment Penalty

Loanfactz.com Supporters