Planning Intermediate: Reverse Mortgages

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With a reverse mortgage, _______.

If the home is jointly owned, both owners must be at least 67

Financial counseling may be required as to the pros and cons

The home can be the borrower's secondary residence

Financial counseling may be required as to the pros and cons. These loans can be complicated; regulators and lenders want to make sure they are well-understood.

If, after selling a home to pay off a reverse mortgage, there is money left over, what happens to it?

The lender keeps it

The borrower or the borrower's heirs keep it

The lender splits it evenly with the borrower or the borrower's heirs

It is taxed for capital gains

The borrower or the borrower's heirs keep it. Any leftover money belongs to them.

All lenders offer reverse mortgages.

True

False

False. Only some of them do.

A reverse mortgage _______.

Is only available to homeowners age 62 or older

Should be considered only by those who are confident of a long life span

Offers only a single payment option

Need not be repaid for ten years

Is only available to homeowners age 62 or older. The other statements are false.

All reverse mortgages are insured by the federal government.

True

False

False. The majority are, but not all.