Those who are 62 and older may be faced with the decision to do a reverse mortgage on their home. A reverse mortgage is where you turn a part of the equity of your home into cash that’s dispersed in monthly payments or a lump sum. It’s a loan that’s not required to be repaid until after the home is sold or the owner dies. While some believe it to be an excellent option, there are those who think it to be a scam… While it is a legitimate process, there are some tips to keep in mind to avoid reverse mortgage scams.
Don’t give money upfront
There are scammers who say you have to pay them in order to participate in the reverse mortgage program, but no legitimate lender is going to ask for money upfront. In some cases, scammers will take thousands of dollars from seniors with the promise of a reverse mortgage, then they disappear. Never give someone money upfront, especially not a substantial amount of money. If they ask for the money, consider it a scam.
Go through a reputable company
Scammers have no problem making up fake company names and a legitimate looking website just to get your cash. If you’ve never heard of the lender before, then don’t deal with them. One of the best ways to find a reputable company is through personal recommendations from loved ones who have been through the process before.
Check on letters or emails
If you get any letters from them whether it’s through email or regular mail, don’t click on links or call back the number on the letterhead. Look up the company’s number online and ask if they ever sent you a letter. If the answer is yes, then you can deal with them directly. The letters and emails may look official, but it could be spam and a way to try to get your personal information.
Do your research
Even if the company seems legit, don’t just take that for face value. Do your research by doing an Internet search for information. While you’re at it, stop at the Better Business Bureau website and check if the company has any complaints against them.
Don’t pay for information
Just like scammers may try to take thousands from you to participate in a program, they may also go a more simple route by telling you that you have to pay upfront for information. Much of the information that they’re asking you to pay for is available for free through the U.S. Department of Housing and Urban Development (HUD) website. There’s no excuse to pay for any of the information if you can get it on your own for no charge.
Don’t deal with someone pushy
A legitimate counselor isn’t going to keep pushing you to participate in a reverse mortgage. They’re going to provide you with information, answer any questions you have, and give you time to think about if it’s something you really want to do. It’s a big decision, and not one to make lightly, and reputable counselors understand that.
Doing a reverse mortgage may seem simple enough, but it’s not a decision to make in five minutes. Take your time, read over the paperwork, and do your research to find out not only if it’s right for you, but if it’s a scam you should avoid.