July 21, 2003, Revised December 2, 2006, October 15, 2007, December 2,
2008, January 25, 2010, July 27, 2012, January 13, 2013, March 28, 2017
The major steps in getting a reverse mortgage are deciding whether or
not you want one, if you do, don't procrastinate but don't accept any
uninvited solicitations, either. Educate yourself about the topic,
and explore state and local programs that might meet your needs.
With a reverse mortgage, it is as important to know what not to do as
what to do. So let me start with that first.
Don’t Respond to Uninvited Solicitations
There are freeloaders about, some calling themselves estate planners,
who would like to be paid for directing you to a lender, or to an
insurance company selling annuities. You don’t need them, just follow
the steps described below. Note: Under legislation passed in 2008,
originators of reverse mortgages are barred from offering any other
financial products to customers for whom they are originating a reverse
mortgage.
Explore State and Local Programs That Might Meet Your Needs
Many states and localities have single purpose programs for seniors
directed to property improvement or payment of property taxes. These
programs are invariably good deals, but they usually have eligibility
criteria that limit their availability. A good place to start looking
for them is the directory of “homes and communities organized by state”
on www.hud.gov.
Educate Yourself About Reverse Mortgages
Almost everything you need to know can be found at
How Do HECM Reverse Mortgages Work? My
site has many other articles on the subject, you can see the list by
selecting Articles in the main menu, clicking on
Types of Mortgages,
then scrolling down to
Reverse Mortgages.
Pay particular attention to the different ways
a borrower can draw funds. Formulate a Preliminary Plan of How You Will Draw Funds
Will you take a line of credit, a monthly payment, or some combination?
Read
Which
Reverse Mortgage Option Should I Choose?Determine How Much You Can Draw on a HECM Reverse Mortgage
You can see
how much you can draw under each HECM option using the professor's
calculator by clicking HERE.
Decide Whther to Proceed With a Reverse Mortgage
Procrastinating on a reverse mortgage is easy because, unlike the
situation when you took your first forward mortgage, you already have
shelter and the children are grown and out. Fight the tendency by making
an informed decision, which is selecting one of four options:
*A reverse mortgage is not for you.
*A reverse mortgage is for you, but you prefer to wait. But don't wait
on the assumption that the amount you can draw will rise as you age,
because rising interest rates in the future will have the opposite
effect. See
Take Out a Reverse Mortgage Now or Later? .
*A reverse mortgage is for you right now.
*Not sure, delay decision until
counseled. If this is where you come out,
formulate questions to be put to a counselor.
Get Counseled
Counseling by a HUD-approved counseling agency is mandatory, regardless
of what kind of loan you select so use it as part of your education. You
can find a counselor on your own by going to
https://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm, clicking on
your state, and selecting from among the agencies that list “HECM
counseling”. Alternatively, you can wait until you select a lender, who
will give you a list of counselors in your area.
The professor also provides counseling support to those who explore
their options
HERE.
Select the Lender and Proceed
Those using the professor's HECM calculator have access to multiple
lenders certified by him/
