Uncover the facts about reverse mortgages. Here’s a quick look at the most common reverse mortgage myths and the truths behind these misconceptions.
MYTH #1: THE LENDER WILL OWN MY HOME IF I GET A REVERSE MORTGAGE.
Truth: Definitely not true! As with any other home loan, as long as you meet the requirements of the reverse mortgage, you retain ownership and title not the lender.*
MYTH #2: I DON’T OWN MY HOME FREE AND CLEAR, SO I CAN’T GET A REVERSE MORTGAGE.
Truth: A reverse mortgage converts a portion of your home equity into cash. Even if you have an existing home loan, you could qualify for a reverse mortgage with enough equity in your home.
MYTH #3: A REVERSE MORTGAGE HAS HUGE OUT-OF-POCKET COSTS.
Truth: Many reverse mortgage costs and fees are the same as those that come with traditional home loan. You’ll know all your costs in advance so there are no surprises at closing. Plus, most fees can be rolled into your new mortgage, further limiting your out-of-pocket expenses.
MYTH #4: THERE ARE LIMITS ON HOW I CAN SPEND THE MONEY FROM A REVERSE MORTGAGE.
Truth: You can use reverse mortgage proceeds to pay down debts, cover medical expenses or home improvement costs, boost your retirement reserves, or pay for everyday essentials. The possibilities are endless!
MYTH #5: 1 CAN’T LEAVE MY HOME TO MY CHILDREN OR HEIRS.
Truth: You can still bequeath your home according to your wishes. The title will pass to your children or heirs, and they decide how to repay the reverse mortgage loan.
MYTH #6: A REVERSE MORTGAGE SHOULD BE MY LAST RESORT.
Truth: Not so! Today’s reverse mortgages can be helpful to a variety of eligible homeowners aged 62 and up. As with any major financial decision, consider your current needs and overall goals and seek professional guidance. Speaking with an established, licensed loan officer can help you decide if a reverse mortgage is right for you.