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REVERSE MORTGAGE MYTHS & MISCONCEPTIONS |
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MYTH 1 |
Reverse Mortgages are only for desperate seniors, or for the “house rich, cash poor.” INCORRECT. |
FACT |
The reverse mortgage is an excellent financial planning tool that is used by homeowners from all walks of life to enhance their retirement years. While some have needed a reverse mortgage more than others, the growing popularity of this product is evidence of its benefit in a wide array of financial circumstances. |
MYTH 2 |
Your home must be debt free to qualify for a Reverse Mortgage. INCORRECT. |
| FACT | Even seniors with an outstanding first mortgage or other debt on their home may qualify for a reverse mortgage. The proceeds of the reverse mortgage, though, must first be used to pay off such debts. |
MYTH 3 |
The bank owns the home after you get a Reverse Mortgage. INCORRECT. |
| FACT | You own your home and retain title throughout the life of the reverse mortgage. Once you permanently move out of your home or pass it to your estate, the loan must be repaid. |
MYTH 4 |
When a Reverse Mortgage comes due, the bank sells the home. INCORRECT. |
| FACT | The bank does not sell your home because the bank never owns your home. When the loan must be repaid, you or your heirs can either pay the balance due on the reverse mortgage and keep the home, or sell the home and use the proceeds to pay off the reverse mortgage and keep the remaining equity. |
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