Mitchell urges elderly homeowners to bring their children, a close friend or church member so they have someone to make sure they understand the complexities. Most opt to pursue reverse mortgages, especially since they don't threaten Social Security checks. The loans aren't considered income. Interest rates are adjustable either monthly or annually. But they don't affect the loan amount.
Interest is paid when the loan is due.
Fees, such as closing costs and a 2 percent origination fee, can be folded into the loan. Homeowners will get monthly loan statements and must allow an inspector to look at the property once a year to be sure it's maintained. Homeowners should never pay a fee for information about reverse mortgages. HUD and Fannie Mae provide that free. Also, be leery of anyone who wants to talk only about one type of reverse mortgage, typically the sort that pays out in a lump sum.