Understanding Reverse Mortgage Government Safeguards

If you are considering getting a reverse mortgage, there are a number of things that you will need to think about. In order to ease your fears, the government has put into effect several safeguards for borrowers. Here are a few government safeguards of reverse mortgages.

Cannot Be Forced Out

One of the biggest safeguards that you will benefit from is that you are not going to have to move out of your house unless you choose to do so. You can live in the property until you die if you want to. These are non-recourse loans and the lender cannot demand repayment of the loan in most situations. The lender can only demand repayment in a few different circumstances. For example, if you do not pay the property taxes or insurance or fail to take care of the house, they could demand repayment. They could also demand repayment if you change the name on the title or take out a second mortgage. You also cannot take in boarders or use the home as a business.

Capped Closing Costs

Another government safeguards that is in effect is capped closing costs. There are limits to the amount of money that lenders can charge you for closing costs on this type of loan.

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