What is a reverse mortgage? Is it a good idea for me?
These are just two out of the hundreds of questions that you are probably asking yourself when looking into a reverse mortgage as a potential option for you, and when asking around about reverse mortgages you might come across facts that might not be accurate. Here are some of the biggest rumors on reverse mortgages and the truth behind them.
The Rumors Identified
People tend to think that a reverse mortgage is a government benefit, which is not true at all. In fact, a reverse mortgage loan is a private home loan that is available to those who meet the necessary requirements. A reverse mortgage allows seniors to borrow against their home equity and put money back into their own pockets!
Another rumor is that a reverse mortgage covers everything that has to do with your home. This is not true; a reverse mortgage loan covers the value of the home itself. It does not cover property taxes, insurance, and homeowners association dues. Those still need to be paid by the homeowner. People tend to think that this loan will cover all home expenses and in reality, this type of loan will only cover the equity of the home.
Next, we have to address the rumor that all loans and lenders are the same. Not one loan is the same as another! Each home has an individual value based on a lot of determining factors. So if your neighbors reverse mortgage loan is one amount, do not count on that to be the same for you. Everyone’s value and interest rates are unique to them so contact a professional today to get a quote on what your loan would be.
Finally, we have the rumor that if you take out a reverse mortgage loan then your medicare and social security will be affected. In most cases this is not true; Medicaid has been affected before by this, but a reverse mortgage does not affect the benefits that you receive from social security and medicare.
Now That We Found The Truth
These rumors listed above are some of the most commonly occurring ones that have lead people to steer away from a reverse mortgage when in reality it might’ve been the best option for them in the long run. Make sure you are doing your research before you listen to the rumors, and always contact a professional when in doubt!What are you hearing that is true? And what of that information is false?