Misconceptions about Reverse Mortgages
The most misunderstood loan is a Reverse Mortgage
If you mention this topic to someone, you will find some outdated beliefs or just far off misconceptions about Reverse Mortgages. To clear up the misconceptions about Reverse Mortgages, here are some of the most heard myths and more importantly, the FACTS:
MYTH: The bank owns the home. FACT: Just like other mortgages, the owner remains on title at all times
MYTH: A Reverse Mortgages is expensive. FACT: Similar cost to all FHA loans and borrower doesn’t have to make mortgage payments – That’s affordable!
MYTH: You can end up owing more than your home is worth. FACT: FHA mortgage insurance covers any deficiency. This is a non-recourse loan which means other assets are not at risk.
MYTH: Borrowers have to pay cash for the home and then get a reverse mortgage. FACT: A Reverse Mortgage can be used to purchase a home so a buyer doesn’t have to fund fully with cash
MYTH: When the borrower dies, the bank will foreclose on the home. FACT: Families of the borrowers have 6 months to sell or pay off the mortgage. There are even possible further extensions available and remember the goal is not for the bank to foreclose.
MYTH: There are no payments on a reverse mortgage including taxes and insurance. FACT: Borrowers must continue to pay applicable property taxes and insurance, as well as occupy the home as a principal residence.
If you have other questions on a Reverse Mortgage or have heard another myth you want clarified, call Team Move today. We believe that senior citizens should be able to live comfortably and are happy to explore if a Reverse Mortgage is right for you.
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