Reverse Mortgage Myths: Clearing Up Common Misconceptions
A reverse mortgage can be a helpful tool for seniors who want to supplement their retirement income or stay in their homes as they age. However, there are some misconceptions about reverse mortgages that might cause people to hesitate before taking out a loan. In this blog post, we’ll dispel some of the most common myths about reverse mortgages.
Myth 1: The Lender Will Take Your Home
The truth is, as long as you continue to live in your home and pay your property taxes and insurance, you will not have to worry about the lender taking your house. The loan only becomes due when you move out of your home or pass away. At that point, your heirs can either sell the property to repay the loan or keep it and pay off the loan with other assets.
Myth 2: My Heirs Will Be Responsible for Repaying the Loan
Your heirs are not responsible for repaying the loan as long as they sell the home within a certain time frame. However, if they choose to keep it, they will be responsible for repaying the loan.
Myth 3: You’ll Have Nothing Left to Leave Your Kids
A reverse mortgage does not put your kids at risk of inheriting nothing from you. The loan amount will be deducted from your estate when your home is sold, but your heirs will still inherit any assets that are not tied up in your home equity.
Myth 4: You Won’t Be Able To Sell Your Home
You can sell your home at any time, even if you have a reverse mortgage. If you sell your home for more than what you owe on the loan, you’ll get to keep the difference. If you sell your home for less than what you owe on the loan, you or your heirs will be responsible for paying off the loan balance.
Myth 5: It’ll Just Give You Another Monthly Payment to Make
A reverse mortgage does not have to be repaid every month like a traditional mortgage. You can choose to make monthly payments if you want, but you don’t have to make any payments as long as you continue living in your home. The loan will only become due when you move out of your home or pass away.
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