FHA Truth in Lending Act
Arizona Reverse Mortgage: You and the Federal Truth in Lending Act
The Federal Truth in Lending Act affords you some protection against unscrupulous lenders. TILA compels all lenders to reveal everything about a loan. There must be full disclosure. If the lender brings up something related to your Arizona reverse mortgage that was not revealed to you prior to signing, they are in violation of federal law. Things they have to reveal are all service charges, fees, origination costs, and closing costs of the Arizona reverse mortgage.
A Reverse Mortgage is available in many types
An Arizona reverse mortgage can assume one of three forms but only one type is insured by the federal government. This loan is the Home Equity Conversion Mortgage and those loans are overseen by the Federal Housing Administration. Arizona residents usually participate in these loans when they take out a reverse mortgage but many people take out privately insured mortgages. These privately insured mortgages do not have any of the extra safeguards that HECMs offer, but they still may be suitable depending on your situation. You should have several discussions with your loan counselor to determine what would work best in your situation.
As yet another investment back up, some people take out life insurance with part of the money from an Arizona reverse mortgage. This may impact your financial situation so speak with your loan counselor about that option. The borrowers take out the life insurance so there is something for their heirs after they pass. Since an Arizona reverse mortgage is a non-recourse loan, the lender has no recourse to any assets other than the house. The life insurance proceeds are untouchable.
More Arizona Reverse Mortgage Loan Information:
Arizona Reverse Mortgage? | Is it right for you? | Arizona Reverse Mortgage Shopping | Truth in Lending Act | Two Big Ifs | Ways to Get Paid | Who and What? | Who Should Not Get a Arizona Reverse Mortgage?