Reverse Mortgage Information
Consumer Information
- What is a Reverse Mortgage?
- Top Ten Things to Know About Reverse Mortgage
- Vermont's Legal Protections for Reverse Mortgage Borrowers
- Approved Reverse Mortgage Counselors
- Helpful Links to Reverse Mortgage Information
Industry References
- How to Obtain Approval for Reverse Mortgage Counseling by Telephone
- Quarterly Reverse Mortgage Report
- A Reverse Mortgage, also called a Home Equity Conversion Mortgage (HECM), is a home loan that converts a portion of home equity into cash. This enables senior citizens to tap the equity in their home for living expenses. Payments may be made to the borrower in a lump sum, a stream of payments, a line of credit, or combinations of these methods. Unlike a traditional mortgage, however, repayment of a reverse mortgage is not required until the borrowers are no longer using the home as their principal residence.
A Reverse Mortgage can be a beneficial financial tool for cash-strapped seniors. But the terms of reverse mortgages are very varied and complex, and it is critical that borrowers know the true risks and tax implications up front to avoid harmful outcomes. On top of being a tricky product to begin with, reverse mortgages have increasingly become a means for unscrupulous companies to exploit or deceive seniors.
Vermont's Legal Protections for Reverse Mortgage Borrowers
- Only federally-insured HUD reverse mortgage programs can offered in Vermont.
- Borrowers must meet with approved independent counselors prior to obtaining a reverse mortgage.
- Recovery of loaned funds is limited to the value of the senior citizens’ home at the time the loan is repaid, even if the value of the home is less than when the reverse mortgage transaction was entered into.
- Borrowers cannot be induced into the immediate purchase an annuity from the funds obtained from a reverse mortgage.
Helpful Links to Information on Reverse Mortgages