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Reverse Mortgages: Clearing Up Common Myths
Are you considering whether a reverse mortgage is right for you or an older homeowner you know?
Before considering one of these loans, it pays to know the facts about reverse mortgages. A reverse mortgage, sometimes known as a Home Equity Conversion Mortgage (HECM), is a unique type of loan for homeowners aged 62 and older that lets you convert a portion of the equity in your home into cash.
But unlike a traditional home equity loan or second mortgage, you don’t have to repay the loan until you either no longer live in the home as your principal residence or you fail to meet the obligations of the mortgage.
| The Myths | The Facts |
|---|---|
| The lender will own my home. | You continue to own your home. |
| My children will have to pay the money back. | Your heirs are not liable for debt on your home. Your estate will pay only the loan amount or the value of your home at sale, whichever is less. |
| My children will not get any funds from my home after I die. | If your home sells for more than the loan obligation, your estate is credited with the difference. |
| I’ll eventually be evicted. | Use it for your primary residence, pay your taxes & insurance, & there’s no risk of losing your home. |
| I can only use the money for certain things. | Proceeds can be used for any purpose. |
| I have to study, then take a test. | Actually, you will attend a session with a HUD-approved counselor. You will learn all about reverse mortgage and the options availalbe. This is an extra measure of protection for you – no test required. |
If you would like to explore the possibilities for yourself or your loved on today, reach out at (732) 626-9827. We'd be happy to address your questions and concerns.
