What is a reverse mortgage?
A reverse mortgage is a Government backed loan available to all homeowners who are 62 years of age and older.
A reverse mortgage provides the homeowner the means to access the equity in their home for personal needs, long term care and investment opportunities.
A reverse mortgage enables the borrower to own a home without making a monthly mortgage payment and without negatively impacting the continued appreciation of the home. Their is never a risk of ever losing the home.
Common misconceptions:
You will no longer own your home:
FALSE!
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You retain ownership of your home. The lender does not take control of the title. As with a traditional mortgage the lender’s interest is only to the extent of the outstanding loan balance, they never have ownership in the property.
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The lender cannot wait for you to “get out of your house” so the lender can be repaid:
FALSE!
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The HUD approved Lender(s) are not in the business of selling homes. They are in the business of helping seniors use some of their equity to meet whatever financial needs they may have.
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Your heirs will have to repay the loan:
FALSE!
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All forms of reverse mortgages are Non-Recourse Loans. The lender can only recover repayment of the loan from the proceeds of the sale of the property.
If the property decreased in value and the loan amount was greater, the lender is paid the difference from the HUD Mortgage Insurance not from your heirs or by the other assets in your estate.
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You will lose all of your equity:
FALSE!
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You continue to own your home and the equity left in it. Since your home can continue to appreciate in value, it’s possible that the remainder of your equity can increase even after the outstanding loan balance is paid.
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