Is a Reverse Mortgage a Scam? | ClarityKeep

Calling a loan a reverse mortgage does not tell you whether the offer is right for you. A Home Equity Conversion Mortgage (HECM) is a real, government-insured loan program. You still need to understand the terms before you agree.

The Federal Housing Administration insures HECMs. See the Consumer Financial Protection Bureau’s explanation.

Check the offer against your needs

Write down what the person selling the loan has told you. Ask for the costs and your duties in writing. Take those details to a housing counselor before you decide.

The Consumer Financial Protection Bureau recommends telling your counselor about a lender’s proposed loan and any other product the lender tried to sell you. Its counseling guide lists questions to bring.

Give yourself time to compare

A useful offer should leave you able to explain the costs and what happens if your plans change. If you still have questions, pause and get answers before you sign.

Use our cost guide and guide to when a reverse mortgage may be a bad fit. Discuss the loan and other options with a HUD-approved housing counselor.