Reverse Mortgage Facts
Myths and Facts About Reverse Mortgages
- by Chris Lamm
Determining the truth about reverse mortgages is not easy. You need to be educated on the program so that you can make the best decision for your personal situation.
Basically, if you get a reverse mortgage you will be getting a loan that will allow you to have a monthly income coming in, or a large lump sum at once, or a credit line. You can get any combination of these things as well. If you have an existing loan, it will be paid off. So you will not have a house payment. The monthly income you receive from the reverse mortgage is guaranteed and you will receive it as long as you remain living in the home. Regardless of the length of your life, your debt can never be more than the worth of your home.
I have presented the 5 most commonly repeated facts and myths below to help you further understand the benefits and ease reverse mortgages will bring.
MYTH 1: The reverse mortgage lender owns your home.
FACT: In fact, you will continue to be the home’s owner and to hold its deed. There aren’t any penalties when selling, paying off, or refinancing your home.
MYTH 2: Qualification is difficult.
FACT: You only need to be 62 years of age an own your own home. You don’t need a lot of credit or a qualifying income for this.
MYTH 3: The fees associated with closing are much higher than they are for other loans.
FACT: Actually, the closing costs are very much the same as any other home loan and you will be aware of the fees prior to closing when you receive a Good-Faith Estimate. You can also choose to finance with your reverse mortgage loan. The only other cost involved may be for an appraisal in advance of closing. Often, this is the only fee you will have to pay before closing.
MYTH 4: This will affect your taxes and social security in a negative way.
FACT: The earnings you obtain from your reverse mortgage will not become an issue with Social Security benefits or income tax.
MYTH 5: There can be problems with the payment.
FACT: You will ONLY be required to pay the loan if you decide to leave the house or if it is sold. If your spouse dies then you will still be able to remain living in the house and vice versa and also the living spouse will continue to receive the exact payment amount each month. If you have any heirs, they will be presented with the opportunity to off the loan with any other assets or they can opt to refinance so that all the remaining equity will become theirs.
Gather all of the specs, when desiring a reverse mortgage loan. Keep in mind that there are other types of mortgage loan solutions and the right choice only depends on your own unique situation. Chris can help you decide which loan is right for you.
Chris Lamm, a published expert on Reverse Mortgages specializes in helping to show his clients their hidden retirement account. You can confidentially contact him at 530-953-8555 or at clamm@s1l.com
