Income Intermediate: Reverse Mortgages

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1.
With a reverse mortgage, _______.
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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.
2.
What type of reverse mortgage is the most common?
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Home equity conversion mortgage (HECM). This type is the most common.
3.
When considering whether to take out a reverse mortgage, you should consider your ability to keep the home in good condition because _______.
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The home may need to be sold to pay off the loan. In order to receive adequate payback, the lender will want to ensure that the home is attractive to buyers.
4.
If, after selling a home to pay off a reverse mortgage, there is money left over, what happens to it?
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The borrower or the borrower's heirs keep it. Any leftover money belongs to them.
5.
In a reverse mortgage, _______.
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A lender makes payments to you based on the equity in your home. That is why it is called a reverse mortgage: the lender pays you.