October 2008
Before you take the plunge
Older house-rich, cash-poor homeowners should follow these steps before jumping into a reverse mortgage.
Consider alternatives
You can sell your home and move to cheaper quarters. Or perhaps a family member can provide money in return for a portion of your home's equity, to be paid back from your estate when you die.
Educate yourself
Start with the AARP's reverse mortgage page, which has a calculator to help you determine how much money you can get.
Get good counseling
It's required if you take a federally backed reverse mortgage, but you should request it even if you're getting a private loan. To find a counselor, go to the HUD reverse mortgages for seniors page and click on HUD Approved Housing Counseling Agencies.
Find an honest lender
Look for lenders through the National Reverse Mortgage Lenders Association. Compare rates and terms from at least three.
Consider alternatives
You can sell your home and move to cheaper quarters. Or perhaps a family member can provide money in return for a portion of your home's equity, to be paid back from your estate when you die.
Educate yourself
Start with the AARP's reverse mortgage page, which has a calculator to help you determine how much money you can get.
Get good counseling
It's required if you take a federally backed reverse mortgage, but you should request it even if you're getting a private loan. To find a counselor, go to the HUD reverse mortgages for seniors page and click on HUD Approved Housing Counseling Agencies.
Find an honest lender
Look for lenders through the National Reverse Mortgage Lenders Association. Compare rates and terms from at least three.
Posted: September 2008 — Consumer Reports Magazine issue: October 2008
