Questions to Ask about Reverse Mortgages

When it comes to dealing with an estate plan, it is important that your estate planning attorney be available to consider a variety of issues involving your assets or investments. With the recent rise in reverse mortgages, there are a lot of considerations and concerns that should be addressed by the home owner as well as the home owners’ family. We have seen an increasingly aggressive sale of reverse mortgages in the senior community and the following are some factors that the family should consider when dealing with a reverse mortgage counselor:

1. Make sure you are getting counseling from an HUD (state required) approved housing counseling agency.

2. Be concerned if your counseling is perfunctory, extremely short, or if you are not encouraged or even given a chance to ask questions.

3. Be concerned if you are discouraged from looking at or discussing other loan products, even if they may not ultimately apply in your situation.

4. Be very concerned if you are discouraged from talking with family, friends or advisors regarding the loan terms or what you intend to do with the money.

5. Make sure that the lender is licensed and has been approved by either the Federal Department of Housing and Urban Development and/or the State of Michigan. Typically, this information is available on-line.

6. Be concerned if you are asked to provide money up front or asked to pay money outside of the closing to speed up the processing of the reverse mortgage. On an average, 14 days is the quickest for reverse mortgages to be handled, whereas 60 days is typical.

7. Be concerned if you are offered a discount to sign by a certain date or are pressured to accept.

8. Be concerned if you are being pressured to use the equity in your home to buy a financial product with the proceeds.

9. Be concerned if any family member is pressuring you to get a loan so that you can give them the money to use for their own personal benefit, even if they promise to pay it back or sign a promissory note.

Remember that your CPA, Estate Planning Attorney and even financial advisors can be of considerable assistance to you when dealing with issues, involving a reverse mortgage.