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"Helping Secure Your Best Retirement"
Reverse mortgages have been around for over 30 years, yet there are still a lot of myths and misconceptions surrounding them. As Reverse Mortgage Professionals, it is our duty to provide you with the facts so that you can make an informed decision about whether a reverse mortgage is right for you.
Myth: Reverse mortgages are a scam.
Fact: Reverse mortgages are a legitimate financial product that is regulated by the government. They are insured by the Federal Housing Administration (FHA), which means that the government is backing the loan.
Myth: The bank takes ownership of your home.
Fact: You still own your home when you have a reverse mortgage. You are simply borrowing against the equity in your home, just like you would with a traditional mortgage. You continue to live in your home and maintain ownership until you decide to sell it or pass away.
Myth: You have to make monthly payments on a reverse mortgage.
Fact: You do not have to make monthly payments on a reverse mortgage. Instead, the interest on your loan accrues over time and is added to the balance of the loan. You can choose to make payments if you want to, but it is not required. Homeowner is still required to pay the property taxes and homeowners insurance while they live in the home.
Myth: You can owe more than your home is worth.
Fact: The FHA has put safeguards in place to prevent this from happening. You and your heirs can never owe more than value of your home, even if the value of your home decreases over time.
Myth: You can’t get a reverse mortgage if you have an existing mortgage.
Fact: You can get a reverse mortgage if you have an existing mortgage. In fact, many people use a reverse mortgage to pay off their existing mortgage and eliminate their monthly mortgage payments. Homeowner is still required to pay the property taxes and homeowners insurance while they live in the home.
Myth: You can’t get a reverse mortgage if you have bad credit.
Fact: Your credit score is not a factor in determining whether you qualify for a reverse mortgage. Instead, the amount of equity you have in your home and your age are the primary factors that are considered.
Myth: You have to use the money from a reverse mortgage for specific purposes.
Fact: You can use the money from a reverse mortgage for any purpose you choose. Many people use the funds to pay off their existing mortgage, supplement their retirement income, pay healthcare expenses, home repairs / improvements. You can also set up available funds in a line of credit that grows for future use.
Myth: You lose your right to your home when you get a reverse mortgage.
Fact: You still have 100% full ownership of your home when you get a reverse mortgage. You can live in your home for as long as you like, and you maintain ownership until you pass away or choose to sell your home.
Myth: You can’t get a reverse mortgage on a condominium or manufactured home.
Fact: You can get a reverse mortgage on a condominium or manufactured home, as long as it meets FHA standards. However, the rules regarding these types of properties can be more restrictive, so it is important to work with a lender like Reverse Mortgage Northwest who has experience in these areas.
Myth: Your heirs will be responsible for paying back the loan.
Fact: Your heirs will not be responsible for paying back the loan unless they choose to keep the home. If they decide to sell the home, the loan will be paid off from the proceeds of the sale and heirs will receive the balance of sale. If the loan balance exceeds the value of the home, the FHA insurance will cover the difference and heirs have no financial responsibilty.
Let us know and one of our lending professionals will be happy to answer any of your questions.
Personal NMLS#126017
Company NMLS# 1842513
Reverse Mortgage Northwest
19324 69th Place West #7
Lynnwood, WA 98036
These materials are not from HUD, FHA, the USDA, or the VA. These materials were not approved by any government agency. They are independent of any government agency. We are not in any way affiliated with any organization listed or referenced within this website, including HUD/FHA/USDA/VA. The inclusion of various education, information, web links, or materials are not an endorsement of the Sender or any of its employees or business partners. For information directly from HUD/FHA, visit https://www.hud.gov/guidance For information directly from the VA, visit http://www.benefits.va.gov/HOMELOANS/ For information directly from the USDA, visit http://www.usda.gov/wps/portal/usda/usdahome?navid=GRANTS_LOANS