“What you do today can improve all your tomorrows.”– Ralph Marston
REVERSE MORTGAGE MISCONCEPTIONS
A reverse mortgage can be an effective retirement planning tool to increase your income streams using one of your largest assets: your home.
Yet many eligible seniors avoid reverse mortgages or are not inclined to consider them due to the many misconceptions that exist about these types of loans.
Let’s tackle a few of the common misconceptions:
Myth: The lender takes title to the home.
Truth: You still retain ownership of your home. The reverse mortgage is only a lien against the property.
Myth: The loan can exceed the value of the property, sticking you or your heirs with a large bill when you eventually leave your home.
Truth: A reverse mortgage is a “non-recourse” loan, which means that you, your heirs, or your estate will never owe more than the appraised value of the home at loan maturity.
Myth: You can’t get a reverse mortgage if you currently have a conventional mortgage.
Truth: Although this is true, you can get a reverse if you use the proceeds to pay off your existing mortgage at close.
Myth: A reverse mortgage can cause you to be evicted from your home.
Truth: You leave your home when you choose. No one will force you from your home. The reverse mortgage is not due until your home is no longer your primary residence.
The Reverse Mortgage: not your typical loan
One of the biggest advantages of a reverse mortgage is that unlike conventional mortgages, there are no payments involved.
Instead, the lender makes payments to the borrower either through a lump sum, monthly payments, or a line of credit.