When potential reverse mortgage borrowers come to me for advice, they often have misconceptions about the reverse mortgage product. I have provided some common myths and facts here, but please feel free to contact me if you have additional questions.
Reverse Mortgage Myths
- You immediately sign over ownership to your home
- It’s only for broke people
- It’s free money
Reverse Mortgage Facts
- You retain title to your home as long as you meet the loan guidelines & requirements such as: maintaining the property, paying all property charges such as property taxes, homeowners insurance, flood insurance, and homeowners association dues (if applicable), and avoiding extended absences from the home longer than six months.
- Many retirees use a reverse mortgage
- It’s a specialized loan. However, program rates, fees, terms, and conditions are not available in all states and are subject to change
- Failure to comply with the loan terms could result in a foreclosure
- Reverse mortgages that are FHA-insured (Home Equity Conversion Mortgages) are insured by the Federal Housing Administration providing protection for both borrowers and lenders