Keep Those Reverse Mortgage Questions Coming!

It seems I started a firestorm with my last blog concerning common myths about reverse mortgages. So much, in fact, I’d like to take this opportunity to further our discussion and address more of your common misconceptions and questions about whether or not you would qualify and/or benefit from a reverse mortgage.

Let’s start out with age requirements. Yes, a reverse mortgage is only available to seniors age 62 or over. A reverse mortgage is a Federal Housing Administration (FHA) government-insured program, and it is not permissible for a mortgage company to use its discretion to circumvent the age requirement. If a homeowner is 62 or older and his or her spouse is named on the title and has not reached the age of 62, there are still ways to obtain a reverse mortgage.

Regarding the costs of a reverse loan or mortgage—the purpose behind a reverse mortgage is to alleviate financial strain, not create more. Closing costs are lower than ever, with several lenders eliminating the servicing fee and/or origination fee on certain products. And keep in mind, the fees are not paid until the loan gets paid off when you/your heirs sell the home or refinance the loan.

The best thing is…there are NO monthly mortgage payments to keep up with!! You are required to carry insurance on the property as I mentioned before, and—here’s something that comes up often—yes, you must be living in the home as your primary residence in order to qualify for a reverse mortgage.

Most people are pleasantly surprised to find out that they do not need to pay taxes on the proceeds from their reverse mortgage. (Please consult your qualified tax advisor for more details).

HUD (the Department of Housing and Urban Development) guarantees that you will never owe more on your home than what it is worth. If you opt to sell your home and you can’t sell it for the amount owed on the reverse mortgage, the government accepts the loss—not you. Additionally, should you decide to pay off the loan or sell your home, there is no repayment penalty.

Now here’s the biggest one of all, especially since about the time most people start thinking about a reverse mortgage is about the same time they are checking into or receiving social security benefits. Social security, as well as most federal benefits, will not be adversely affected by your proceeds from a reverse mortgage.

Have you considered a reverse loan to help alleviate some of your financial stress? Where do you go for accurate information? Feel free to call us toll-free at 1-800-250-8810 or fill in our questionnaire at the Reverse Mortgage Helpdesk for more information.

If you find yourself struggling financially, a reverse mortgage may give you the breathing room you need and financial comfort you deserve.

Sincerely,

Brandon S. Smith
President & CEO, The Reverse Mortgage Helpdesk