Is a Reverse Mortgage Right for You?

What is a Reverse Mortgage?

Property Type - If you own a house, condominium, or townhouse, or a manufactured home built on or after June 15, 1976, then you may be eligible for a reverse mortgage.
Age, Equity, and Fees - You must be at least 62 years old, and you must either own your home free and clear or have a substantial amount of equity (at least 50%). Borrowers must pay an origination fee, an up-front mortgage insurance premium, other standard closing costs, ongoing mortgage insurance premiums (MIPs), loan servicing fees, and interest.
Counseling - The U.S. Department of Housing and Urban Development requires all prospective reverse mortgage borrowers to complete a HUD-approved counseling session. This counseling session, which usually costs around $125, should take at least 90 minutes and cover the pros and cons of taking out a reverse mortgage given your unique financial and personal circumstances.
Collateral Protection - Your responsibilities are to stay current on property taxes and homeowners insurance (and homeowners association fees, if you have them) and keep the home in good repair.