Income Intermediate: Reverse Mortgages

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1.
A home on which you are taking out a reverse mortgage _______ your primary residence.
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Must be. This is a requirement.
2.
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.
3.
Which of the following is true of reverse mortgages?
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Reverse mortgages are a type of loan that need not be repaid as long as you own your home. Since these are loans, the money you receive is tax-free.
4.
What type of reverse mortgage is the most common?
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Home equity conversion mortgage (HECM). This type is the most common.
5.
If you have a reverse mortgage, the balance of your loan _______.
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Increases over time. Your balance actually increases, due to several factors.