A reverse mortgage is a perfect option for people approaching retirement if they want to maintain the value of their home for the rest of their lives. More wealth managers and financial advisors are recommending it.
Reverse mortgages are still the subject of some myths and misconceptions, so we will give the right information about a few of the worries homeowners commonly express to us in Reverse Mortgage CA.
Myth #1: "My Heirs and I May Owe More Money than the House Costs"
As long as the home is on the market, the loan repayment debt cannot exceed the net proceeds from the sale. The FHA insurance fund will cover the borrowers and the lender for any loss if there is a shortfall at the time of maturity.
Myth #2: "My Home Must Be Debt Free To Eligibility for A Reverse Mortgage"
To minimize principal and interest payments and improve their monthly cash flow, many seniors use a reverse mortgage to pay off an existing mortgage; the homeowner may be eligible for a reverse mortgage as long as the property has sufficient equity. The senior is still responsible for the monthly insurance and tax payments.
Myth #3: "I May Lose My House"
When acquiring a reverse mortgage, the borrower is indeed the legal owner. Throughout the reverse mortgage, the borrower maintains it as their principal residence, regardless of age or length of occupancy.
The reverse mortgage cannot evict homeowners as long as insurance and property taxes are paid, the home is in habitable condition, and at least one of the borrowers remains in the home and maintains it as a primary residence.
Myth #4: "My Social Security and Medicare Benefits Will Be Affected"
Usually, a reverse mortgage does not affect Medicare or Social Security payments. A reverse mortgage may impact benefits received from the federal Supplemental Security Income (SSI) program or a state program, depending on the borrower's circumstances. The borrower needs to contact the relevant government organizations and his financial advisor.
Myth#5: "There are Restrictions On How I Want To Use The Money"
Many people have used reverse mortgages to finance travel, pay off debt or help their children. But more importantly, many use them to generate a monthly income or to support themselves while still living in their own homes. The money from a reverse mortgage can serve almost any purpose.
Americans are living longer, so reverse mortgages are evolving as a long-term financial planning tool to ensure financial independence and live more comfortably. Reverse Mortgage CA has an experienced staff capable of providing the optimal service for you, with the ability to answer all your questions and provide you with the information you need. Contact us today!