For some senior homeowners, a reverse mortgage may be an effective way to benefit from the money you’ve invested in your home over the years.
But, experts warn, it’s important to fully understand the obligations of this loan product. “Some seniors and their families struggle to understand the obligations of a reverse mortgage,” explains Rob Greenbaum, a director in Fannie Mae’s marketing department.
Not meeting the conditions of your reverse mortgage may put your loan in default. This means the mortgage company can demand the reverse mortgage balance be paid in full and may foreclose and sell the property.
Fannie Mae now features educational information about reverse mortgages on this website . “We explain the responsibilities of a reverse mortgage and tell seniors how to get help if they’re unable to pay property-related expenses or have other hardships,” notes Greenbaum.
A housing counselor can help you review your financial situation and work with your mortgage servicer so you can repay any past-due expenses. In addition, your counselor will be able to refer you to other resources that might assist you in balancing your budget and retaining your home.
Finally, if you have someone helping you with your mortgage who may need to speak with your mortgage company or counselor, you’ll need to sign an authorization allowing disclosure of your loan information or finances to a third party.