Separating Myth from Reality: The Truth About Reverse Mortgages
Reverse Mortgage Myths and Facts
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Reverse Mortgage Myths and Facts
Reverse Mortgage Myths and Facts
Reverse mortgages often come with misconceptions that can create confusion for seniors considering this financial option. If you’re a senior living in Plano, TX, understanding the truth behind these myths can help you make an informed decision about your financial future. Below, we clarify some of the most common myths about reverse mortgages by providing the facts that matter.
Myth: You Immediately Sign Over Ownership of Your Home
Fact:
You retain full ownership of your home as long as you meet the loan guidelines. These include maintaining the property, paying property taxes, homeowners insurance, flood insurance, and homeowners association dues (if applicable). Additionally, you must avoid absences from the home longer than six months. Like any other mortgage, a lien is placed on the property to secure repayment of the loan, but the title remains in your name.
Myth: If You Take Out a Reverse Mortgage, Your Children Won’t Inherit Any Equity
Fact:
A reverse mortgage is a non-recourse loan, which means repayment is limited to the sale of the home and cannot exceed the home’s value. Your heirs will not be personally responsible for the loan. If there is remaining equity after the loan is repaid, it goes to your heirs. Alternatively, your heirs can choose to refinance the loan and keep the home, ensuring they retain ownership of the property.
Myth: A Reverse Mortgage Requires You to Make Monthly Payments
Fact:
A reverse mortgage does not require monthly payments, providing financial flexibility for seniors. However, you can choose to make payments if you wish. Borrowers are still responsible for property taxes, homeowners insurance, and property maintenance to ensure the loan remains in good standing. This allows you to enjoy financial freedom while meeting basic responsibilities for your home.
Uncover the Truth About Reverse Mortgages
Reverse Mortgage Myths and Facts: What You Need to Know
Confused by misconceptions about reverse mortgages? Get clear, accurate answers to help you make informed decisions. Learn the facts today!
Will I lose ownership of my home with a reverse mortgage?
Fact: No, you retain ownership of your home as long as you meet the loan guidelines, including maintaining the property, paying taxes and insurance, and living in the home as your primary residence.
Will my children lose all the home equity if I take out a reverse mortgage?
Fact: Not necessarily. The remaining equity depends on factors like home appreciation, loan duration, and optional payments. There may still be equity left for your heirs.
Are my children responsible for repaying the reverse mortgage loan?
Fact: No, reverse mortgages are non-recourse loans. The lender can only be repaid from the home's sale proceeds, up to its value. Heirs can refinance the loan to keep the home.
Do I have to make monthly payments with a reverse mortgage?
Fact: No monthly payments are required. Borrowers are only responsible for property taxes, insurance, and maintenance.
Do I need to own my home outright to qualify?
Fact: No, but any existing mortgage debt must be paid off at closing using the reverse mortgage proceeds.
Can I sell my home if I have a reverse mortgage?
Fact: Yes, you can sell your home at any time. The reverse mortgage will need to be paid off at closing, just like any traditional mortgage.
Contact Your Reverse Mortgage Specialist
Reach out to Ken Andreas for a free assessment on reverse mortgages. Discover how your home can support you today.