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Reverse Mortgage Misconceptions

Here are a few of the most common misconceptions

•        I’ve Heard that I give up ownership to the bank if I get a Reverse Mortgage?

 False.  You own your home and retain title throughout the life of the reverse mortgage.

•         I’ve heard that Reverse mortgages are only for seniors who can’t pay their bills.

False. This program has been used as an excellent financial tool by homeowners from all walks of life to enhance their retirement years.

•         I can’t qualify if I still have a mortgage on my home.

 False.  Even seniors with an outstanding first mortgage or other debt on the home may qualify.  The proceeds of a Reverse Mortgage, however, must first be used to pay off such debts.

•         I can never sell my house after I do a Reverse Mortgage?

 False.  You are not required to stay in your home for any length of time with a Reverse Mortgage.

•         I’ve heard that you must use a portion of the proceeds to buy an annuity or some other investment vehicle

False.   This money is now yours to do with what ever you desire. You actually sign a document at closing that states you are NOT buying an investment policy from the lender.

•         Someone told me that the out of pocket expenses are high to start a Reverse Mortgage?

False.  All closing and other fees including the appraisal fee are wrapped into the loan.  (An appraisal fee will be the only monies owed if the loan does not close).

•         I’ve heard that after you die, the bank sells your house for what is owed on the Reverse Mortgage just to get the loan paid!

False.  Upon the death of the last owner on title your heirs may either pay the balance due on the Reverse Mortgage and keep the home or sell the home at current market value, and use the proceeds to repay the Reverse Mortgage.  If they sell the home, any equity left over is directed to your estate or passed to your heirs after the loan is satisfied

•         I’m afraid if I do a Reverse Mortgage my kids will not have an inheritance

False.  Any remaining equity after the Reverse Mortgage is satisfied goes directly to your estate or passed to your heirs.

•         I’ve heard that if I have a Reverse Mortgage, I could owe more than it’s worth when I die.

False.  This is a non recourse loan which means you will never owe more that the house is worth.  Additionally, your heirs will not be responsible for any debt under a Reverse Mortgage.  The home is the only asset held to repay this type of loan.

•         If I don’t pay my homeowners insurance and yearly taxes, the bank can call the loan due?

True.  The homeowner is required to maintain the property, have consistent homeowners insurance and pay yearly property taxes to keep the Reverse Mortgage in good standings.

I hope you found this information helpful!  If you have further questions or concerns, I would be happy to discuss them with you personally.    Our hope is after you read this report you will have the knowledge to make the right decision for you!

As with anything related to your financial future, you should always consult your financial advisor.

www.clgloans.com                     email: daveg@clgloans.com

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