Not Your Father's Reverse Mortgage

When the term “reverse mortgage” arises, it often conjures outdated notions and unwarranted apprehensions. However, it is important to cast aside preconceived notions. Let’s approach reverse mortgages with a fresh perspective and tackle the misconceptions head-on. Reverse mortgages can very beneficial and while not for everyone, a reverse mortgage may be a very important retirement or estate planning tool for certain homeowners.

Busting the Myths

There are many myths and misconceptions out there surrounding reverse mortgages. “I have to deed my house to the bank”. Fact or Fiction? Fiction. You will not have to deed your house to the lender or any entity. In fact, like with any mortgage, you retain ownership of your home. “I am going to stick my heirs with a big bill.” Fact or Fiction? Fiction. The notion that reverse mortgages saddle your heirs with a burdensome bill is just not true. Through proper planning, your heirs will inherit a slightly adjusted amount, but rest assured, they won't be left with any looming financial obligations.

What is a Reverse Mortgage?

In essence, it is a tailor-made home loan crafted exclusively for homeowners aged 62 or above. The allure lies in its ability to provide you with tax-free income, utilizing the equity tucked away in your home, all without imposing those pesky monthly payments. Yes, you read that correctly – with a reverse mortgage, you're the one being paid, not the other way around. This financial instrument presents a remarkable avenue for homeowners to tap into their home equity without fretting about tax implications. While undoubtedly advantageous, it's important to ascertain if a reverse mortgage aligns with your unique circumstances.

Benefits

If you believe a reverse mortgage could be right for you or your loved ones, prepare to revel in a host of benefits. For starters, retaining ownership of your home is a given, as long as you comply with the terms, like any traditional mortgage. Say goodbye to burdensome monthly mortgage payments; a reverse mortgage frees you from this obligation entirely. The cherry on top? You'll continue to receive funds as long as you remain living in your home. But, of course, there are certain intricacies and restrictions that you need to be aware of.

Requirements

As mentioned earlier, you need to be 62 or older and you should have a lot of equity in your current home or paid off completely. Keep in mind you do not have to have your home paid off to get a reverse mortgage. Like any loan, you will have to meet credit score requirements and other requirements of your lender. Unlike a traditional mortgage where there are income requirements, a reverse mortgage is based on your equity. This allows many retirees on fixed income to enjoy the benefits of a reverse mortgage. It is always best to discuss your mortgage options with an experienced professional.

Talk to a Professional

We have relationships with mortgage professionals that understand all the ins and outs of mortgage options for seniors. Our partner lenders will walk you through your mortgage options and let you know if you qualify for a reverse mortgage. Ultimately a reverse mortgage, like any retirement or estate planning tool, is not a one-size fits all solution. If you are curious about your mortgage options and if a reverse mortgage is a fit for you, contact us today and we will put you in touch with one of our professional lending partners for a free consultation.

Don’t let the past reputation of reverse mortgages scare you away. Over the years many safeguards have been added. Definitely do you your homework and know that reverse mortgages today and different than those of yesteryear. While they may not be a fit for everyone, a reverse mortgage may be very beneficial and a powerful tool as part of any retirement planning or estate planning strategy and a great way for you to access your hard-earned money tax-free.

For more information on reverse mortgages, contact Jeff Higgins today and he will put you in touch with one of his preferred lending partners.