A reverse mortgage can be an appealing option for many seniors looking to supplement their income during retirement. This type of loan allows homeowners to borrow money against the equity in their home and receive payments, either as a lump sum, a line of credit, or as monthly payments. However, reverse mortgages are not without risks, and it’s important to fully understand how they work before making any decisions. In this guide, we’ll walk you through the ins and outs of reverse mortgages, including the pros and cons, eligibility requirements, and how to choose a reputable lender.
The goal of the first part of this guide is to offer information on the reverse mortgage product and potential uses for a reverse mortgage. The second details what NAOSA Reverse Mortgage Professionals advise to protect yourself.
There are many places these loans can be obtained. NAOSA recommends finding a lender who is local, experienced, and specialized (only does Reverse Mortgages).
The program should fit and assist in solving the concerns mentioned earlier in this document. You should not be told to withdraw more funds upfront than you need, but encouraged to allow these funds to remain in the line of credit. Any lender who encourages you to take a large, unneeded cash withdrawal is not acting in your best interest.
Note: Items listed below as a NAOSA Gold Standard of Professional Practice™ are business practices required for NAOSA professional membership. For more details, please visit the NAOSA Consumer Guides page.
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NAOSA requires members to act in utmost good faith when working with clients. Members must agree to act in a fiduciary manner in a way that the member reasonably believes to be in the best interest of the client. In addition to compliance with all federal and state regulations, each professional member of the National Association of Senior Advocates must also follow and act in accordance with the NAOSA Consumer Guides published herein. Members who are found not in compliance with these standards will be censured, with membership subject to revocation.
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