Massachusetts senior citizens seeking extra income through reverse mortgage loans have a new outlet to assist them in their decision-making.
The Office of Consumer Affairs and Business Regulation and the Executive Office of Elder Affairs announced Friday the launch of a Web site, http://www.mass.gov/reversemortgage, that allows visitors to gain key insights into what is involved in a reverse mortgage loan.
Using the tools on the site, the state hopes they can better determine if it is prudent to apply.
“Reverse mortgages are extremely complicated products, and consumers … should make every effort to obtain independent legal and financial advice when considering one,” Undersecretary of Consumer Affairs and Business Regulation Daniel C. Crane said.
Reverse mortgages are loans that let homeowners, usually 62 years and older, liquefy the equity in their home into income.
The loans are growing in popularity, with flexible payment options and no payback on the loan until after the borrower is deceased or no longer resides at the home.
The approval amount on a loan is based on a property’s value, the borrower’s age and accumulated equity in a home. Reverse mortgages can provide a needed supplement to Social Security and reduce the burden of unforeseen expenses.
Although the site is not a substitute for professional counsel, which is a mandatory step meant to protect the consumer, it does list a loan’s primary components for those wishing to capitalize on the reverse mortgage trend.
“It is important to appreciate the costs associated with these loans and that, over time, the loan will deplete the accumulated equity in your home,” Crane said.
The Executive Office of Elder Affairs has offered seniors tips to bear in mind as they explore reverse mortgages:
- Review all aspects of the loan — lump sum, term loan, and line of credit — to determine if any of these reverse mortgage options are well suited to their needs.
- Obtain independent legal and financial advice to understand the impact of the transaction, including any factors that may trigger repayment of the loan.
- Explore alternative products and resources with a reverse mortgage counselor and independent financial representatives.
Executive director of Homeowner Options for Massachusetts Elders, Len Raymond, offered words of caution to seniors considering a reverse-mortgage loan, advising they do not sign on to anything before careful research.
“A reverse mortgage should be the last resort for seniors,” Raymond said. “In-depth counseling is critical for any senior who is experiencing financial hardship.”
Found here.
Sphere: Related Content
