While many advertisements portray reverse mortgages as the answer to financial troubles for the elderly, the Better Business Bureau warns that may not be entirely true. The agency says you should do plenty of research before signing up for a reverse mortgage. Fees can be significant, and the mortgage could deplete assets that will be needed when you’re no longer able to live in your home.
Investigator Bill Smith tells The Big Z this type of loan allows you to tap into the equity you have built up.
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Before you get a reverse mortgage, you must meet with a home equity conversion mortgage (HECM) counselor. The Fair Housing Administration (FHA) has information on the loans free of charge, and many counselors provide their services free or at low cost. A list of approved counseling agencies is available by calling 1-800-569-4287.