• Nichole Fox

Consumer Safeguards for Reverse Mortgage Loans


It is natural for many seniors and their family members to be somewhat apprehensive when they encounter something that sounds like it could be too good to be true. If it is a proposition that they have never heard of, they may approach the idea with some skepticism.


However, you can rest assured that the government has put in place many safeguards to ensure that we do our job right and you and your family fully understand how a reverse mortgage works before you enter in a reverse mortgage transaction.

The government requires all Reverse Mortgages to have additional safeguards in place in order to protect seniors. These include the following:

  • Counseling: All reverse mortgage applicants are required by the U.S. Department of Housing and Urban Development (HUD) to undergo third party counseling. Freedomstar Financial encourages this counseling so that you feel 100% comfortable with the process and understand all of your options.

  • No Prepayment Penalty: No additional costs are incurred, should you choose to repay the loan early.

  • Non-Recourse Loan: You are protected in the event that home prices begin to fall. You can rest assured that you will never owe the bank more on the loan than the house is worth when it is time to pay back the loan.

  • HUD Fee limitations: A combination of Federal statutes and HUD mandates control how Reverse Mortgage Rates are determined, and what fees can be charged to the consumer. The loan origination fee is regulated by the U.S. Department of Housing and Urban Development (HUD). Other reverse mortgage costs may vary among creditors and loan types. 

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