Reverse mortgage ‘danger signals’
This article was from a Massachusetts source, but can apply to reverse mortgages on a nationwide basis.
With Reverse Mortgages growing in popularity, the misuse of these loans also grows. Be on the lookout for these ‘Danger Signals’:
1. The lender is not licensed or doesn’t have a plan approved by the Massachusetts Division of Banks
2. You’re getting counseling only from the lender
3. Counseling is done just before, or at the closing
4. You’re being discouraged from talking with family and friends about the loan
5. You’re being pressured to use equity in your home to buy something with the proceeds
6. You’re asked for a large deposit upon applying
7. You’re told a large deposit will speed up processing
8. You’re pressured to make a quick decision
9. You’re offered a discount to sign by a certain date
10. Insurance premiums and other costs are not explained clearly
11. Your children, relatives or others are pressuring you to get a loan so they can use the money. Even if they promise to pay you back, the loan puts your future security at risk
Source: Homeowners Options for Massachusetts Elders (HOME)
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