Is reverse mortgage insurance obligatory in all cases?
Answer:Generally, if you are taking a HUD reverse mortgage, it will be FHA insured.
Reverse mortgage insurance provided by FHA makes the reverse mortgage less expensive to the senior than the proprietary reverse mortgage programs, offered by private reverse mortgage lenders. Even if you can get reverse mortgage insurance from a private insurer, you will have to calculate when you will fare better - going with a federal-backed reverse mortgage insurance, or with a private reverse mortgage insurance.
Yet, the answer is no. Reverse mortgage insurance is not obligatory if you go to a private lender. There are private reverse mortgage lenders that will offer you a reverse mortgage and will not require reverse mortgage insurance. Before you decide to go with them to avoid paying for insurance, compare the interest rates of the reverse mortgage you are offered. It may turn out that interest rate is so high that it eliminates the benefit of not having to pay for reverse mortgage insurance.
Again, all these answers can be asked for free at a reverse mortgage counseling session - either provided by your local HUD office, or by some non-profit organization dedicated to preventing seniors from reverse mortgage complications.
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