When I first heard about the Reverse Mortgage, or Home Equity Conversion Mortgage (HECM), I only learned negative things about the program. I later came to realize that these were all myths or misunderstandings about the way the program used to work.
Today, lenders and mortgage companies who offer the Reverse Mortgage are highly regulated by the federal government's lending and housing arms, the Federal Housing Administration (FHA) & the US Department of Housing and Urban Development (HUD). This loan is also insured by FHA, protecting the current homeowners as well as their heirs.
There are only two upfront costs, if any. The first is your HECM Counseling, which is usually given over the phone by a third party FHA approved counseling company. Offering an unbiased explanation of the program, the company helps you understand every aspect of a reverse mortgage. The other upfront cost is the appraisal of your home, paid directly to the appraisal management company. All other costs are rolled into the loan amount.
It's no secret that the reverse mortgage has higher costs than most types of mortgages, but it also offers a benefit that no other mortgage offers - the ability to borrow money without EVER having to make payments until you pay off the entire loan or move out of your primary residence.
Below is some in-depth information coming directly from the FHA & HUD websites with reverse mortgage help. This is general information that will help you understand the process a bit better. After reading this, I can provide you with specific details as to how the program would work for you and the benefit (or loan amount) you qualify to receive.
FHA Reverse Mortgages (HECMs) for Consumers
This section explains the requirements, how it works, costs, and repayment.
Top Ten Things to Know if You're Interested in a Reverse Mortgage
I can elaborate on these questions
Home Equity Conversion Mortgages for Seniors
This is the home page that you can go to and see all the links on HUD's related to the program.