Reverse
Mortgages are revolutionizing the way seniors are securing financing.
While HUD's Reverse Mortgage is a safe and federally-insured program
that gives older Americans greater financial security, many seniors
are bombarded with falsehoods. Please take the time to read through
the Myths and Misconceptions and contact a representative if you
have any questions. Unfortunately, the relative newness of this
program has ignited the old saying, "people fear what they
don't understand." So please exercise your own due diligence
and get the proper answers; if someone can't answer your question
than go to someone who can.
You can receive free information about reverse mortgages by calling
1-877-944-OMNI, toll-free. Since your home is probably your largest
single investment, it's smart to know more about reverse mortgages,
and decide if one is right for you!
The Bank or Lender will take my home.
Not True - The homeowner always retains title to the property and can choose to sell the home at anytime. There are no prepayment penalties or restrictions of any kind.
My children will be held responsible for repayment of the Reverse Mortgage.
False - The Reverse Mortgage is a non-recourse loan. This
means that the lender can only derive repayment of the loan from
the proceeds of the sale of the property. Your heirs will not be
responsible for the repayment of the loan. The reason why is that
it is Government insured and the bank can only receive payment
of the loan from the value of the home, regardless of current status.
The same rule applies if a catastrophe struck and the value of
the home is reduced.
To qualify, my home must be paid off "Free & Clear".
Not True -
You may payoff a mortgage or equity loan with a Reverse Mortgage.
In fact, many people get a Reverse Mortgage for this reason:
to get rid of their monthly payments forever.
I must have good income and credit to qualify.
False - A Reverse Mortgage has no income or credit qualifications. To qualify you need to be at least 62 years of age and your home must be your primary residence and the home must have enough equity in it. Consult your representative for further info.
The Reverse Mortgage requires that I make monthly payments.
Not True - There are never monthly payments.
The borrower is responsible for payment of taxes, insurance, and general upkeep of the home and that is it.
If I do a Reverse Mortgage I will eat up all my equity and leave nothing for my kids.
False - "Retained
Equity" is a very important concept to grasp. Realize that
your property will continue to appreciate (the whole value of
the estate) and you pay interest on only the smaller amount borrowed.
Please consult your representative for amortization tables that
might apply to your specific situation.
