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Reverse Mortgage Specialists |
Utah Agents: |
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Dispelling the Myths |
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People tend to stay away from the very idea of a reverse mortgages, in part because some early companies and their programs tarnished the reputation of a reverse mortgage. Before becoming regulated by the government there were reverse mortgage companies that used unscrupulous methods, which ultimately required a change in the reverse mortgage industry. (These types of reverse mortgages are no longer done.) The federal government stepped in and began to regulate and insure the industry making it a legitimate loan, which can be very beneficial to seniors. Some of the following myths still plague the Reverse Mortgage industry: Myth 1: The Lender gets your house. False. You keep ownership of the house. The lender has no rights to your home and cannot foreclose on you as long as you keep up the taxes and insurance. Myth 2: You’ll have no estate left. False. Any equity left in your home goes to your estate after the loan and interest is paid off. HUD limits the amount you can borrow leaving you equity in your home. Myth 3: Poor credit will keep you from qualifying. False. Your credit rating is not a consideration in your approval for a reverse mortgage. (A credit report is run only to check if you owe the government any money. If you do the amount owed will be paid from the reverse mortgage.) Myth 4: You must be debt free. False. One benefit of a reverse mortgage is it may be used to pay off an existing forward mortgage (mortgage or equity line of credit) leaving you with no monthly payments. (This will be determined by the lender.) It may also be used to pay off other debts you have if you choose to do so.
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