There are many myths about Reverse Mortgages.
Here are just a few of those myths:
1- If you obtain a Reverse Mortgage, you lose title to the property.
Absolutely not true. The home remains the asset of the mortgagee.
2- If you obtain a Reverse Mortgage, you cannot place the home in a living trust.
Absolutely not true. You can place a home in a living trust even if you obtain a Reverse Mortgage.
3- The proceeds from a Reverse Mortgage are taxable.
Absolutely not true. Loan proceeds from a Reverse Mortgage are not taxable. Borrowers should seek tax advice on how proceeds may affect government needs-based programs such as Medicaid and Medi-Cal.
4- There are restrictions on how you use the proceeds from a Reverse Mortgage.
Absolutely not true. You may use the proceeds from a Reverse Mortgage any way you like.
5- Reverse Mortgages require monthly mortgage payments.
A major benefit of a Reverse Mortgage is the luxury of not making a monthly mortgage payment! No monthly mortgage payments are due for as long as the homeowner lives in the home and meets eligibility requirements for maintenance and paying property taxes and insurance.
6- A Reverse Mortgage may cause property taxes to increase.
Absolutely not true. Since a Reverse Mortgage is a Home Equity Conversion Mortgage (H.E.C.M.) there are no tax ramifications of any kind including property taxes. Borrowers should seek tax advice on how proceeds may affect government programs such as Medicaid and Medi-Cal
7- A Reverse Mortgage can get “upside down” so the heirs will be personally liable for more than the home is sold for.
Absolutely not true. Heirs will never be responsible for Reverse Mortgage balances in excess of market value. The heirs inherit the home and keep any remaining equity after the Reverse Mortgage is paid off.
8- An applicant for a Reverse Mortgage must be employed.
Absolutely not true. The federal government structured the Reverse Mortgage to benefit the senior citizens, those who most probably would not be employed.
CALL ME FOR A FREE CONSULTATION TO DETERMINE IF A REVERSE MORTGAGE MAY BE OPTIMAL FOR YOU, YOUR FAMILY OR FRIENDS
(909) 273-5556 / (760) 407-6740
HOME FINANCING, INC.