Reverse Mortgage Rescission Period

RESCISSION PERIOD AND REVERSE MORTGAGES

Federal Law requires lenders to offer a rescission period for each Reverse Mortgage transaction. Details of the borrower’s rights during the rescission period are included in the following list:

  • The borrower has the right to cancel the loan without penalty within 3 business days of closing including Saturdays.
  • The loan is not funded until the end of the rescission period.
  • And if the property is in foreclosure or there is a tax sale date then the rescission can be waived.

 

A REVERSE MORTGAGE DOES NOT HAVE A PREPAYMENT PENALTY

A great feature of the Reverse Mortgage is that a borrower may prepay all or part of the outstanding balance at any time without penalty. Repayment in full will terminate the loan agreement. The loan is repaid in the following order:  Accrued interest including the initial MIP, approved service fees, closing costs, accrued interest and the remaining principal loan balance.