Reverse mortgage myths
May 31, 2020 | Posted by: Alex Vinarski
Reverse mortgages have come a long way. They have evolved from a needs-based product to a solution that many financial planners recommend as an important component of a comprehensive retirement plan.
Unfortunately, there are still many misconceptions regarding reverse mortgages. Below, the myths are separated from the facts.
Myth: The bank owns the home.
Fact: You always maintain title ownership and control of your home, and you have the freedom to decide when and if you'd like to move or sell.
Myth: You will owe more than your home is worth.
Fact: Clients can qualify for up to 55% of the appraised value of the home, 33% on average. Due to conservative lending practices, you can be confident that there will be equity left in the home when the loan is repaid. In fact, over 99% of the clients have equity remaining in the home when the loan is repaid.
Myth: A reverse mortgage is a solution of last resort.
Fact: Many financial professionals recommend a reverse mortgage because it's a great way to provide financial flexibility. Since it's tax-free money, it allows retirement savings to last longer.
Myth: You cannot get a reverse mortgage if you have an existing mortgage.
Fact: Many clients use a reverse mortgage to pay off their existing mortgage and other debts, freeing up cash flow for you to use as you wish. How great would it feel to be free of regular mortgage payments?
I'm a Certified CHIP Reverse Mortgage Specialist and can answer any questions you may have!
You've paid into your home, now let your home pay you back to enjoy the years ahead.