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Reverse Mortgages
A look at where to go on the Web to find information or services that are useful, substantial and available for free or at a reasonable price.
For many families, their home is their largest single Other Organizations
investment. Older homeowners looking for ways to raise
current income may consider tapping into their home equity AARP Reverse Mortgages Area
by using a reverse mortgage. www.aarp.org/revmort
A reverse mortgage is a loan available to homeowners The American Association of Retired Persons offers
age 62 or older and is used to convert part of the home a reverse mortgage calculator, a 44-page downloadable
equity in a property into cash without having to sell the consumer guide, a glossary of terms, and a fact sheet on
home or pay additional bills. reverse mortgages.
Repayment of the loan is deferred until the owner dies, The calculator requires you to enter your zip code, date
the home is sold, or the owner leaves (for example, moves of birth and how much your home is worth (or your best
to an assisted care facility). Seniors can use the funds for guess). It will then produce a table that estimates how much
any purpose such as supplementing Social Security, paying cash you could get with: 1) a single lump-sum advance; 2)
for medical expenses or making home improvements. a line-of-credit account that grows larger each year if left
There are no minimum income or credit requirements, untapped; or 3) a monthly loan advance for as long as you
but applicants may be required to get financial counseling. live in your home.
The lowest-cost reverse mortgages are single-purpose Articles include “Key Decisions About Reverse Mort-
reverse mortgages offered by state and local governments, gages,” “Making Your House Work for You,” and the
while private sector reverse mortgages and federally insured cautionary “Reverse Mortgage Seduction.”
reverse mortgages are generally more expensive.
Whether to use a reverse mortgage requires a careful National Reverse Mortgage Lenders Association
understanding of the product, including the risks and costs. (NRMLA)
Where can you go to learn more about reverse mortgages? www.reversemortgage.org
The Web sites below offer a good starting point. The NRMLA site offers current news on reverse mort-
gages and a series of free consumer guides that you can
Government Agency download or have mailed to you by calling 866/264-4466.
The About Reverse Mortgages area discusses the basic
U.S. Department of Housing and features of reverse mortgages, the steps to attain a mortgage,
Urban Development (HUD) typical costs, payment options and consumer protections.
www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm The Locate a Lender tool lets you search by state. All
A good place to start if you’re considering a reverse lenders are members of the NRMLA, licensed to originate
mortgage is HUD’s list of the “Top 10 Things to Know if reverse mortgages in the states in which they are listed, and
You’re Interested in a Reverse Mortgage.” (Use the above have signed the NRMLA Code of Conduct.
link or enter “top 10 things to know” in the search box.) The site also offers a reverse mortgage calculator and
HUD’s Federal Housing Administration reverse mortgage includes borrower stories.
program is called the Home Equity Conversion Mortgage
(HECM) plan. The Top 10 list defines a reverse mortgage National Aging in Place Council (NAIPC)
and details how to qualify, home eligibility, the differences www.naipc.org
between a reverse mortgage and a home equity loan, and NAIPC provides a forum to help seniors who would like
how you receive payments. The site also provides a list of to continue living in the their own homes. The site offers a
HUD-approved housing counseling agencies by state; you list of National Aging in Place Council members who offer
can also call 800/569-4287 for the agencies near you. reverse mortgages and their contact information.
August 2009 17
