Top 10 Things You Should Know About Reverse Mortgage

Contributed by mm | August 25, 2006 2:34 PM PST

Laura Coffey highlights top 10 things you should beware before you jump on the reverse mortgage bandwagon.

1. Your age matters. For most reverse mort-gages, a borrower must be at least 62 and must live in the home as a principal residence. Generally, the older you are and the more valuable your home is, the more money you can tap.

4. Choose a payment preference. The loan can be paid to you in three ways: as a lump sum, in regular monthly or quarterly installments or as a line of credit you can tap as needed.

5. Know your responsibilities. Borrowers are responsible for property taxes, insurance and home repairs. Your loan could become due and payable in full if you fail to meet those responsibilities.

6. Get free help. Don't sign a service agree-ment with anyone who promises to help you find a reverse mortgage lender or apply for a loan. Such help is available at little or no cost from the U.S. Department of Housing and Urban Development or a HUD-approved housing counseling agency. Call HUD's toll-free Housing Counseling and Referral Line at 1-888-466-3487 for details.

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