Question:

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.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: