A reverse mortgage provides financial assistance to seniors or other property owners who want increased liquidity or want to stay in their houses for as long as possible. However, the types of reverse mortgages that are available and the ways in which they are marketed are often confusing, which can lead to borrowers taking out loans for the wrong type of home loan or getting a loan when it’s not the best choice for them.
It does not help that there are so many myths that surround reverse mortgages. If you are looking for more information about this mortgage product, this blog post will debunk the myths associated with it!
Common Myths About Reverse Mortgages
- Reverse mortgages are the last resort. A common myth is that reverse mortgages are the last resort, but this is not true. In fact, reverse mortgages can be an excellent option for people aged 62 and over who have a home that they want to stay in, little to no other liquid assets, and a stable source of income. Reverse mortgages are not a last resort; they are a tool that can help seniors in their retirement. This is because the loan is repaid when the borrower passes away or moves into a long-term care facility. To ensure that this loan is not passed on to relatives or heirs, it must be repaid out of the cash value of your home.
- The bank takes ownership of your home. Many people assume that the bank takes your home if you have a reverse mortgage, but this is not true. Although this is one way that a reverse mortgage can work, the borrower still technically owns the home because the bank is only providing a loan secured by the home. Borrowers can use the loan to pay off their other debts or to maintain their mortgage and other expenses. However, the loan will be repaid out of the cash value of your home when you move out or pass away.
- You must be in need of money when you take out a reverse mortgage. Some people believe that when you take out a reverse mortgage, you must be in need of money. However, this is not true. Because reverse mortgages are a loan, they are only repaid when there is a financial need or the homeowner has moved out of or passed away in the home. Because of this, people who have an existing mortgage and home equity need not apply for a reverse mortgage. A reverse mortgage is for homeowners who have free and clear equity in their home but want to remain in it as long as possible.
- You can’t get a reverse mortgage if you have a mortgage. Another common myth is that you can’t get a reverse mortgage if you have a mortgage. While this can be the case, it is not true for everyone. In fact, if you qualify for a reverse mortgage, you can still take out the loan even if you have an existing mortgage. It is important to know that any outstanding debt on your property will not be negatively impacted. As long as you are able to repay the loan, you can take it out.
- You must stay in your home for the rest of your life. This is another common myth associated with reverse mortgages. While the loan is repaid when you move out, you do not have to stay in your home for the rest of your life. If you are selling your home and moving to a smaller one, you can take a loan with you to buy the new home.
Your Reverse Mortgage Lender in North Palm, Florida and Beyond!
As you can see, reverse mortgages have been associated with many myths over the years, but these myths are not always true. Under the correct circumstances and with the right loan product, reverse mortgages can be a great way for seniors to enjoy their retirement!
If you are interested in learning more about reverse mortgages, please feel free to contact America’s Mortgage Solutions! We serve North Palm, West Palm, and throughout the state of Florida. Let us help you get a reverse mortgage or other conventional home loans in Florida! Get pre-approved today! Call (561) 316-6800 to schedule your consultation.
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