Senior Reverse Mortgage

There is a great deal of confusion surrounding reverse mortgages.  With so much conflicting information, it can be difficult for consumers to distinguish fact from fiction. To resolve some of your confusion, review these common misconceptions and get the facts about getting a reverse mortgage for seniors.

Misconception #1: Seniors must own their home free and clear to qualify for a reverse mortgage.

It is true that more equity generally means a higher payout. However, seniors can have an existing mortgage balance and still qualify for a reverse mortgage. In fact, most seniors do. According to AARP, one of the most common reasons seniors get a reverse mortgage is to pay off their existing mortgage balance. This helps seniors eliminate their monthly mortgage payments and increase their cash flow.

Misconception #2: There is only one type of reverse mortgage for seniors.

Reverse mortgages are not a one-size-fits-all type of loan. The Department of Housing and Urban Development (HUD) currently offers three different types of Home Equity Conversion Mortgages (HECMs): the HECM Standard, HECM Saver, and HECM for Purchase. Borrowers can also choose how to receive their loan proceeds. Seniors have the option of receiving their proceeds as a lump sum, line of credit, or in monthly payments. These options allow seniors to tailor their reverse mortgage to meet their individual needs.

Misconception #3: Upon closing a reverse mortgage, the lender gains ownership of the property.

Getting a reverse mortgage does not mean giving up ownership of your home. You will retain the title of the home until the home is sold.  This means that you must maintain the condition of your home, continue paying for homeowners insurance, and keep up with your property taxes. It is also important to understand that once the loan becomes due the home is not necessarily turned over to your lender. While your heirs can sign the home over to your lender, they can also choose to sell the property, repay the loan, and pocket any additional proceeds from the sale.

For more information, contact us at 877-267-0274 and let one of our loan specialists clear up any other misconceptions you might have about getting a reverse mortgage for seniors.