5 Reverse Mortgage Myths: The Facts
The bank will own my home.
FACT: Just like any mortgage or home equity loan, you continue to own your home, with your name on the title. Of course, you must meet your loan obligations: keeping current with property taxes, homeowners insurance and maintenance.
Reverse mortgages take advantage of retirees.
FACT: Reverse mortgages are specifically designed to help older homeowners. The industry is also highly regulated: Any lender offering reverse mortgages must follow strict state and federal guidelines and regulations that are in place to protect borrowers.
I won’t qualify because I have an existing mortgage.
FACT: Proceeds from your reverse mortgage would first be used to pay off any existing mortgage(s). Speak with us today to find out if you are eligible.
I won’t be able to leave my home to my heirs.
FACT: Your heirs will still inherit your home, but they will have to pay back the loan balance if they want to keep the home. Or, they can sell the home to repay the loan. Once it’s repaid, they receive any remaining equity—just like a traditional mortgage or home equity loan.
A reverse mortgage is a loan of last resort.
FACT: Many savvy homeowners use a reverse mortgage strategically—for example, as a safety net in case of emergencies. There have been a number of product advances that have made reverse mortgages more attractive in retirement planning. Today, financial advisors are also increasingly viewing them as an important option to be considered.