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The reverse mortgage is a popular way for senior citizens to access the equity in their homes. If you have a parent that is over the age of 62, you may be able to help them get access to a reverse mortgage. Here are a few things to consider about helping your parents with a reverse mortgage.
Finding a Lender
The first thing that you should do is help your parents find a reputable lender to work with. In this industry, there are many lenders that are nothing more than a scam. They like to prey on unsuspecting senior citizens and take advantage of them. You should make it a priority to help them identify a good lender that has their best interests in mind. Do some homework on potential lenders and find out which ones are the best in the industry. You can check online reviews and the Better Business Bureau website to get an idea of who is reputable and who is not.
Explaining the Process
If your parents are unfamiliar with how the reverse mortgage process works, you may need to explain it to them. Some seniors are not experienced with financial matters and might need some assistance in understanding the terms. Make yourself available to them to answer questions whenever they have them. Explain to them how they will be essentially selling the equity in their homes to the lender. They will be able to receive a monthly payment from the lender or set up a line of credit to access. You should also make sure that they understand that they are free to live in the house after they have stopped receiving payments. Many seniors have misconceptions about what happens if they outlive the loan. However, they are free to live in the house as long as they want.
In order to qualify for a reverse mortgage, your parents will also have to go to an informational meeting with a certified counselor. This process is designed to make sure that they understand how the reverse mortgage is going to work. The counselor will go over many different aspects of the reverse mortgage with them. They will make sure that they understand how much money they are eligible for and what will happen once the payments run out.
If they will allow you to, you might want to go to the informational meeting with them. This way, you will have access to what the counselor says and you will be able to talk with your parents about it. Many people go to this type of informational meeting and then forget what was said afterward. If you are there, you will be able to help them remember the important information and answering questions that they might have after the meeting. You may also be able to ask questions during a meeting that will help you and your parents understand the process better.
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