Myths and facts of reverse mortgages
Jun 21, 2012, 8:49 a.m.
When it comes to Reverse Mortgages (www.onereversemortgage.com) and myths it seems like there are more myths with them than with Big Foot. The myths with Reverse Mortgages are exactly that, myths. So, let's set the story straight and get the facts in order. Below are some of the most common ones and the real facts.
Myth 1 - Your lender takes the title to your home.
Fact - Title on a Reverse Mortgage is no different than any other mortgages you've ever had - only the homeowners are on the title. When the house is sold or becomes vacant, the loan must be repaid, but the title is never negotiable.
Myth 2 - You need good credit for a Reverse Mortgage.
Fact - A Reverse Mortgage is only based on your home's equity and the borrower's age. Income and credit are not qualifying factors.
Myth 3 - Reverse Mortgage borrowers owe more than their home is worth
Fact - All of our Reverse Mortgage are "non-recourse" loans which means that the borrower can never owe more than the value of the home regardless of the loan balance.
Myth 4 - I can't get a Reverse Mortgage if I already have a mortgage on my home.
Fact - Your new Reverse Mortgage will pay off your current mortgage, eliminating any monthly mortgage payment you have now! In fact, that is one of the popular choices seniors decide to select with the funds from their Reverse Mortgage.
Myth 5 - There are limits on how you can spend the money from your Reverse Mortgage.
Fact - It's your home, it's your money! You can spend your tax-free money from your Reverse Mortgage any way you'd like.
Myth 6 - My children will be responsible for the repayment of the loan.
Fact - Reverse Mortgage are "non-recourse" loans. That means if the property is sold to pay off the loan when you pass away or decide to leave the home for other reasons, there will be no mortgage debt for your family or heirs to repay. The maximum amount owed is the current market value of the house. If your family or heirs wish to keep the home, they would pay the balance in full to the Reverse Mortgage lender.
Myth 7 - Only low-income seniors get Reverse Mortgages
Fact - Seniors from all different income levels decide a Reverse Mortgage is right for them every day. For some seniors it is a way to eliminate their monthly mortgage payment and have more financial freedom. For others it is a way to have a financial cushion for those unexpected bills. Some seniors are able to live their retirement more comfortably, and with little worry about how they will make ends meet. A Reverse Mortgage is not designed for one particular person; it's for any senior looking to make the most out of their retirement.
Myth 8 - Reverse Mortgage lenders take advantage of seniors
Fact - As a consumer, you should make sure you are dealing with businesses who are a member of the Better Business Bureau and the National Reverse Mortgage Lenders Association (NRMLA) One Reverse Mortgage is a member of both of these consumer watch dog groups. Our goal is to help you make the most out of your retirement. We will help you decide which Reverse Mortgage program will work best for your situation. We want you to be knowledgeable about the process and able to make the most of the Reverse Mortgage program.