A reverse mortgage loan can be a useful and practical tool for older homeowners looking to secure their financial future, but there’s a lot of misinformation surrounding how these loans work and who they can benefit. Make sure you know the truth about these five common misconceptions.
You will no longer own your home.
So long as you meet your standard loan obligations (residence, maintenance, property tax, and homeowner’s insurance), you’ll retain full ownership of your home.
You’ll be taxed on the money you receive from the loan.
Loan proceeds are not considered income and you will not pay taxes on loan proceeds.
Your heirs will be stuck with your debt after you pass away.
While it is true that your surviving kin will be responsible for the loan payoff, the amount can be covered by selling the house or relinquishing the deed to the lender. In the case of a sale, your heirs will receive the remainder of the home’s equity in cash after the loan balance is paid.
Any existing mortgages must be paid off in full in order for you to be approved.
Borrowers often use the money from a reverse mortgage to finish paying off their original mortgage, bringing an end to monthly mortgage payments. (It is the borrower’s responsibility to continue to pay for property taxes, homeowners insurance, and home maintenance.)
Reverse mortgages are for people with financial difficulties.
Used properly, a reverse mortgage can be a smart addition to any senior homeowner’s financial and estate planning strategy, freeing up funds and increasing overall quality of life.
Call 303-740-8300 today to learn more about Reverse Mortgages or visit our website: https://www.sffmortgage.com/reverse-mortgages