MythBusters: Reverse Mortgage Edition
To qualify for Home Equity Conversion Mortgage (HECM), or reverse mortgage you must:
- You must be 62 years of age or older.
- Own your home and live in it (primary residence only, no second or investment homes).
- Have enough equity, which we can help you determine using today’s values.
The myths and misconceptions about reverse mortgage, however, still exist and they need to be clarified.
The main fear a potential borrower has is losing their home if they get a reverse mortgage. In reality, the home is still yours and you remain on title and have the option to sell, refinance or pass it on to your heirs if you live there for the rest of your life. When your home is sold, the mortgage is repaid including all interest and fees and the equity or profits go to the heirs.
Instead of getting a reverse mortgage, homeowners also consider selling their home. After going over the numbers, many are left with less if they sell after a few years. While not always the case, we are happy to go over your particular situation.
Seniors are also under the misconception that if they already have a mortgage, they can’t qualify for a reverse mortgage. In truth, reverse mortgages can be used to pay off an existing mortgage if the borrower already has enough equity in their home.
Reverse Mortgages are not for everyone, and each case is specific, for some though, they are a viable option and borrowers should excavate through the myth to find the truth.