TOP TEN REVERSE MORTGAGE MISCONCEPTIONS
1. I have to sign my home over to the bank – You keep title to your home.
2. The bank will get my home when I pass on – Your heirs will inherit your home. They decide whether or not to sell the home, or keep it in the family.
3. A reverse mortgage is only for desperate people – Some seniors do it in order to keep from losing their home, but most use it as a financial planning tool. After a lifetime of using your income to increase equity, a reverse mortgage lets you convert some of your equity into a tax-free income supplement.
4. I don’t qualify because I have a current mortgage – In fact, many seniors use a reverse mortgage to pay off their traditional mortgage or home equity loan.
5. My Social Security, Medicare, and other benefits will be reduced – All of these types of benefits will not be affected at all.
6. I can’t afford to make any payments – You make no payment as long as you or your spouse continues to live in your home.
7. My children could wind up owing money because of this – By law, you and your heirs can never owe more than your home is worth, regardless of its future value.
8. A reverse mortgage sounds risky. I could lose my home or be forced to move out. The government both regulates and insures reverse mortgages. Your responsibilities are to pay your property taxes and homeowner’s insurance. Do that, and you’re assured of remaining in your home for life.
9. I would be short-changing my children – If they can live with inheriting some, instead of all of your equity, you will be able to improve your quality of life now.
10. Reverse mortgages are expensive – They used to be, but FHA recently reduced the cost of their insurance by 75% for most homeowners, so total fees are now much lower.
Call Rick Schluter at 973-726-0548 with any questions about reverse mortgages