1) I would be selling my home to the bank:
FALSE: You keep your home, the lender will add a lien ( just like any mortgage) but you still have complete control over your property
2) My heirs won't inherit anythig:
FALSE: Your estate only owes the balance on the mortgage. The balance is however much you spent and interest. Remember, also, that your heirs will also have any investments you have made with the reverse mortgage proceeds.
3) I might "outlive" the loan:
FALSE: FHA/HUD reverse mortgages are designed specifically so that you cannot outlive the loan. When you get a reverse morgage, the lender will charge you 2% to purchase mandatory FHA mortgage insurance. That insurance guarantees that even if you live to be over 100 years old you can never owe more that the value of your home and you can never be forced to leave.
4) I can be forced out of my home:
FALSE: you cannot be forced out of your house FHA specifically states that this can never happen.
5) Social Security and Medicare will be affected:
FALSE: money from reverse mortgages is not considered income because it is a loan. For this reason, a reverse mortgage does not affect Social Security and Medicare benefits.
6) I would have to pay taxes on a reverse mortgage:
FALSE: you're already pay taxes on the money when you're reporting the equity into your home. When you take it out again, it is not taxable. Remember, this is a loan.
7) There are big out-of-pocket expenses:
FALSE: all the costs, whenever closing or interest are financed. That means there are never out of pocket expenses at any point in the reverse mortgage.
8) A reverse mortgage is similar to a home equity loan:
FALSE: home equity lines may have several requirements such as high income, low debts and good credit that a reverse mortgage does not. Also, you can outlive the home equity loan and end up being foreclosed on by the bank. This can never happen with a reverse mortgage.
If you are 62 years of age or older, own a home ,you are already qualified for a reverse mortgage. No income or credit scores are required.
Joe D'Agostino, is a Licensed Mortgage Banker with the State Of New Jersey with over 38 years of helping people like you, Nation-Wide.
Feel free to call or e-mail me.