Is a reverse mortgage right for you?
These loans are available to those 62 and older and allows them to draw cash out of their house without having to sell it or make monthly payments. The loan is paid off when the owner dies or sells the house.
Borrowers must undergo housing counseling beforehand to qualify for a federally insured reverse mortgage. The counseling is to help older consumers understand what they are taking on.
The Consumer Credit Counseling Service of Maryland and Delaware has received a grant to provide free counseling. Usually, such sessions cost about $125.
To set up a free counseling session, call the nonprofit at 1-866-731-8486.
Reverse mortgages are complicated and shouldn’t be entered into lightly.
The Consumer Financial Protection Bureau last year issued a report on reverse mortgages and said that they are so different from traditional mortgages that consumers had difficulty understanding how they worked. The agency noted, too, that there were a lot of misleading ads about reverse mortgages. That surely only adds to consumers’ confusion.
“When it comes to reverse mortgages, the playing field has recently shifted some,” Consumer Credit Counseling’s Tom Simonton said in a press release. “Most large banks no longer offer this type of financing, and the void has been filled by a new group of lenders. Some are reputable -- while others may not have your best interests at heart.”Copyright © 2014, The Baltimore Sun