A reverse mortgage can be risky. You can even lose your home. While there may be legitimate reasons for a few people to get a reverse mortgage, too often they are used to take people's homes. In this article, I discuss the risks of getting a reverse mortgage, who might legitimately want to get a reverse mortgage and how to avoid getting scammed.\n\n\n\nThe reverse mortgage industry is big business and scammers are always on the prowl. Keep in mind that reverse mortgages would not exist if there wasn\u2019t money to made with them.\n\n\nClick to DISCOVER a Proven Path to Financial Independence!\n\n\nAlso, you should know that it is possible to lose your home after you take out a reverse mortgage.\n\n\n\nThere are situations where a legitimate reverse mortgage might be a reasonable option. However, because the industry is known for scams and unscrupulous brokers, proceed with caution and consult with a trusted lawyer and financial adviser.\n\n\n\nWhat is a Reverse Mortgage Loan? \n\n\n\n\n\n\n\nA reverse mortgage is a loan where your home is the collateral.\n\n\n\nThe difference between a reverse mortgage and a traditional home loan or equity loan is that the lender intends to take possession of the home when the borrower dies.\n\n\n\nTypically, if the homeowner moves out or sells the property, the reverse mortgage must be repaid.\n\n\n\nBe aware that there are substantial risks with reverse mortgages.\n\n\n\nReverse Mortgage Explained.\n\n\n\nOnly homeowners who are 62 years old or older can qualify for a reverse mortgage. Also, they must also live in the home as their primary residence and have title to the property or have substantial equity.\n\n\n\nHECM Reverse Mortgage Purchase.\n\n\n\nThe HECM, otherwise known as a Home Equity Conversion Mortgage available through Fannie Mae, is the most common form of a reverse mortgage.\n\n\n\nA Reverse Mortgage is Different.\n\n\n\nThe biggest difference between a traditional home loan and a reverse mortgage is that a reverse mortgage does not require the borrower to make payments. Instead, payments are made to the homeowner.\n\n\n\nReverse mortgage payments may be monthly revenue, a line of credit, lump sum or a combination of monthly payments and a line of credit.\n\n\nClick to DISCOVER a Proven Path to Financial Independence!\n\n\nReverse Mortgage Disadvantages and Dangers.\n\n\n\nReverse mortgages can be expensive and complicated. Unfortunately, some mortgage brokers trick seniors into getting a reverse mortgage with false promises and lies.\n\n\n\nHowever, even legitimate reverse mortgages are not recommended for everyone.\n\n\n\nThe Reverse Mortgages Scam. \n\n\n\nSenior citizens who are eligible for reverse mortgages are also the most vulnerable to scams.\n\n\n\nWhen considering a reverse mortgage, assume the broker will try and scam you. Make them prove to you they are honest and reputable.\n\n\n\nSigns of a reverse mortgage scam. \n\n\n\nBelow are obvious signs of a reverse mortgage scam.\n\n\n\nBeware of High-Pressure Sales Pitch. \n\n\n\nWhen pressure is used in any sales situation, it\u2019s a clear sign of a scam. Hang up the phone. Walk away.\n\n\n\nNo one can make a rational decision under pressure. When you are pressured to make a decision, you are not being treated fairly. And if you\u2019re not being treated fairly, you know darn well you\u2019re about to be scammed.\n\n\n\nNever do business with someone you can\u2019t trust. If the sales person is using pressure, you can\u2019t trust them. Walk away.\n\n\n\nPressure is a clear sign they don\u2019t care about you. They only care about your money and getting as much of it as they can. Walk away!\n\n\n\nIt\u2019s not unusual for a reverse mortgage company to advertise \u201cFree Money\u201d in their marketing letter.\n\n\n\nThere is no free money with a reverse mortgage. The amount of the loan is determined by the value of the home and the equity that has accrued.\n\n\n\nAlso, there are fees and conditions associated with any reverse mortgage. Remember, the big print giveth and the small print taketh away.\n\n\n\nCan You Lose Your Home with A Reverse Mortgage?\n\n\n\nIt is possible to lose your home with a reverse mortgage.\n\n\n\nUnfortunately, some brokers will intentionally mislead you by claiming you can\u2019t lose your home when you get a reverse mortgage. This is NOT true.\n\n\n\nA reverse mortgage is a loan and, like any loan, it may become due and payable. In other words, a reverse mortgage is subject to foreclosure like any other mortgage.\n\n\n\nHere\u2019s how you might lose your home if you have a reverse mortgage:\n\n\n\nThe home is sold, or the title to the home is transferred.\n\n\n\nThe borrower moves out of the home for more than 12 months.\n\n\n\nThe borrower does not pay the taxes on the home or fails to keep insurance on the home or fails to maintain the home in a reasonable condition to sustain the property\u2019s market value.\n\n\n\nIf you are considering a reverse mortgage, it is essential that you understand the property can be foreclosed for relatively minor issues such as failing to keep the property insured or maintained.\n\n\n\nAdditional conditions for foreclosure will be listed in the contract. Read it carefully.\n\n\n\nInclude Both Spouses.\n\n\n\nSome brokers will encourage a homeowner to put only the oldest spouse on the reverse mortgage. This is a trick to take possession of the property as early as possible.\n\n\n\nThe amount borrowed with a reverse mortgage is based, in part, on the age of the borrower. And the loan becomes due when the last borrower dies.\n\n\n\nThe Danger of Getting a Reverse Mortgage Too Soon.\n\n\n\nIf you get a reverse mortgage when you are still in your 60s, you may outlive the loan and lose your home. Remember, if you run out of money and can\u2019t pay the taxes or insurance on your home, the lender has the right to foreclose.\n\n\n\nWho Should Get a Reverse Mortgage?\n\n\n\n\n\n\n\nThere are situations where a reverse mortgage makes sense. However, these situations are not nearly as common as many brokers claim.\n\n\n\nIf you are elderly, own a home and need income, a reverse mortgage might be appropriate.\n\n\n\nAn ideal candidate for a reverse mortgage might be an 87-year-old widow with health issues who needs additional income to pay for health care, housekeeping, and assistance with daily activities.\n\n\n\nA properly structured reverse mortgage would allow her to continue living in her home and also pay the additional expenses.\n\n\n\nHowever, in any case, proceed with caution when considering a reverse mortgage. If you determine a reverse mortgage might be a reasonable solution for your situation, shop among brokers.\n\n\n\nDo not choose a broker simply because they sent you a letter. Keep in mind the obvious signs of a scam mentioned above.\n\n\n\nFor More Information, see the resources listed at the bottom of this article.\n\n\n\nWho Should NOT Get a Reverse Mortgage?\n\n\n\nReverse mortgages are NOT appropriate for most people.\n\n\n\nIf you are not approaching the end of your life, a reverse mortgage is probably not for you.\n\n\nClick to DISCOVER a Proven Path to Financial Independence!\n\n\nReverse Mortgage Alternatives.\n\n\n\nDon\u2019t risk your home because you are struggling financially. Instead, use the situation as motivation to earn more money.\n\n\n\nI can show you how to build an online business that pays a full-time income. It won\u2019t cost you a dime to get started.\n\n\n\nClick Here to learn how you can earn a full-time income with your own online business\n\n\n\nInfo Reverse Mortgages.\n\n\n\nAARP\u2019s reverse mortgage webpage: www.aarp.org\/revmort.\n\n\n\nReverse mortgages insured by the U.S. Federal Government through Fannie Mae) www.hud.gov Search for "Home Equity Conversion Mortgage."\n\n\n\nIf you found this article helpful, please leave a comment below. Thank you.