As a senior, age 62 or older, a Reverse Mortgage enables you to tap into the equity of your home and benefit you financially today! The funds you receive can be used to eliminate your monthly mortgage payment, pay off debt, increase your monthly cash flow, or any other way you see fit.
Know the Facts!
As Reverse Mortgages are less common than Forward Mortgages, consumers tend to have less information available to them on this unique financial tool.
Because of the lack of information, there tend to be some misconceptions:
Reverse Mortgage Myths
Myth #1 – My children will become responsible for the repayment of my Reverse Mortgage
Fact – Because Reverse Mortgages are considered “non-recourse loans”, the sale of the property is used to pay off the loan when the homeowner passes away or decides to sell the home. Therefore, there is no mortgage debt left for the heirs to pay off.
Myth #2 – I have an existing mortgage; does this mean I am not eligible for a Reverse Mortgage?
Fact – If you currently have enough equity in your home, you may be able to pay off your existing mortgage with the funds from your Reverse Mortgage. In fact, paying off an existing mortgage tends to be the number one reason Seniors decide to take out a Reverse Mortgage!
Myth #3 –I am on a limited fixed income; will this prevent me from obtaining a Reverse Mortgage?
Fact – Because a Reverse Mortgage pays you, as opposed to a Forward Mortgage where you have to make monthly payments, a fixed income does not disqualify you. Oftentimes, Seniors who may not qualify for traditional financing are able to qualify for a Reverse Mortgage.
Myth #4 – I don’t know for sure how I plan to use the funds from my Reverse Mortgage. Is the bank going to tell me how I have to spend the money?
Fact – The funds from your Reverse Mortgage are yours to use however you see fit. The most popular uses for Seniors are to pay off an existing mortgage, pay off debt, and have a financial “cushion” for any unforeseen emergencies.
Myth #5 – Does a Reverse Mortgage mean that I no longer own my home?
Fact – You retain ownership of your home during the life of your Reverse Mortgage and can choose to sell the home at any time. As long as you continue to pay the property taxes, homeowner’s insurance and maintain the property, the loan will not be called due.
Why should you consider a Reverse Mortgage?
As people in the United States live longer, many Seniors find that they are not prepared, financially, for their extended retirement. Even those that have diligently saved may find themselves “short” each month.
With the length of retirement extending longer and longer, Reverse Mortgages may just be the answer!