Reverse Mortgages for Massachusetts Consumers

Reverse mortgages differ substantially from conventional forward mortgage loans.  A reverse mortgage loan is a special type of mortgage loan for seniors (generally age 62 and older) that pays a homeowner loan proceeds drawn from accumulated home equity.  Unlike a traditional home equity loan or second mortgage loan, no repayment is required until the borrower(s) no longer use their home as their principal residence.  Interest on a conventional loan is calculated as simple interest, while on a reverse mortgage the interest is calculated as compound interest.

What Consumers Should Know About Reverse Mortgages

  • Consumers are required to attend counseling by an approved agency prior to obtaining a reverse mortgage.
  • Over time the reverse mortgage loan balance may increase impacting the accumulated equity in the mortgaged property.
  • All consumers listed on the deed of a home owned by someone seeking a reverse mortgage must be over the age of 62.  If one spouse is under 62, that person's name must be removed from the title.
  • In order to obtain a reverse mortgage consumers must pay off any existing traditional mortgage.  A reverse mortgage must be the only lien on a property.
  • The reverse mortgaged property must be the primary residence of the eligible consumer.
  • Loan originators are not permitted to require consumers to purchase other financial products (i.e. annuities, long term care insurance etc.) as a condition of obtaining a reverse mortgage. 
  • Upfront fees and costs are typically associated with reverse mortgages and should be reviewed carefully.  Typical fees include origination fees, mortgage premium insurance, closing costs, service fees, and monthly mortgage fees.  

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Relevant Statutes & Regulations for Reverse Mortgages

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Additional Reverse Mortgage Resources for Consumers 

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