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their current homes for 20, 30 or 40 years and they never intend to move. They are perfect
candidates for a reverse mortgage.

Don’t get a reverse mortgage if you plan to sell your home in the next 2‐3 years!

While a reverse mortgage is a great program for seniors who never want to leave their current
home, it’s probably not a good option if you plan to sell your house very soon. Because of the
closing costs involved and the accrued interest adding to the loan balance, you would use up

some of the equity that could be used to buy your next home. If you can afford it, you would
be better off not taking out any loan and waiting until you sell your home to get the full sale
proceeds. You could then use a reverse mortgage purchase loan to buy your next home IF that
will be your last home. The reverse mortgage program is primarily intended to be used on your
final home. That is, the place you intend to spend the rest of your life. But if you have to sell
your home sooner than expected, you would just pay off the balance of the reverse mortgage
as you would any other loan on your house. There is no “prepayment penalty.”

Consumer Protection Features of the HECM Loan Program

Because it is an FHA government loan program, there are several consumer protection features
built into the HECM reverse mortgage program.

• You must go through counseling conducted by a neutral, third‐party nonprofit agency to
make sure you fully understand all the rules and ramifications of getting a reverse
mortgage. We are not allowed to do any processing of your reverse mortgage
application until you provide us with a signed copy of the certificate proving that you
have completed your government‐required counseling.

• You are not allowed to take out more than 60% of your reverse mortgage loan limit at
closing of escrow on your HECM loan, you must wait one year before you can access the
rest of your reverse mortgage equity loan. The reason for this rule is protect seniors
who have been victimized in the past when a relative convinced them to do a reverse
mortgage and then ran off with all the cash from the loan proceeds. Under current
rules, only 60% of your available funds can be taken at closing, so you can’t be totally
wiped out.

Reverse Mortgage Truth Report ©Best Mortgage Inc. (425) 649‐6000 Page 10