Seniors and Myths for Reverse Mortgage loans in Las Vegas
Throughout the last 23 years there have been many stories, some horror stories about people using Reverse Mortgages. Times have changed, the product has changed, and today, the FHA is looking out for Seniors and their homes. Below are the requirements of getting a Reverse loan, the Myths (you may have heard), and a Q&A to show you this is a good and safe product to use.
Qualifying for a Reverse Mortgage:
- No Credit Scores!
- No Monthly Mortgage Payments!
- Primary Residence Only.
- 62 Years of age or Older.
- Purchase New Home or a Refinances.
- The New Financial Assessment.
- No Employment Verification.
- Your name remains on Title.
- Your Reverse Loan can be refinanced in the future.
- You may sell your Property at any time.
Top Myths About Reverse Mortgages
WOULD I BE SELLING MY HOUSE TO THE BANK
You keep the title to your house. The lender will add a lien (just like any other mortgage lien) on the property but you will still have complete control over it.
MY SPOUSE HAS TO MOVE WHEN I PASS
You always have the security of knowing when one spouse passes, the other will remain in the property for as long as they occupy it as their primary residence, or until they wish to sell it.
MY HEIRS WONT INHERIT ANYTHING
Your estate only owes the balance on the reverse mortgage. Let's say you got a reverse
mortgage and owed $50,000 after 5 years. Then you decided to sell the house for $250,000. The lender gets $50,000 and you get $200,000.
I MIGHT "OUTLIVE" THE LOAN
FHA/HUD reverse mortgages are designed specifically so that you can't outlive the loan. When you get the reverse mortgage, the lender will charge you 2% to purchase mandatory FHA mortgage insurance. That insurance guarantees that even if you live to be 100, you can never owe more than the value of your home and you can never be forced to leave.
I COULD GET FORCED OUT OF MY HOME
FHA/HUD reverse mortgages specifically state that you can not be forced out of your home. Your responsibilities are to pay your taxes, homeowners insurance and maintain the house. You do these things, and you cannot loose your home.
SOCIAL SECURITY AND MEDICARE WILL BE AFFECTED
Money from a reverse mortgage is not considered income because it is a loan. For this reason, a reverse mortgage does not lower Social Security and Medicare benefits.
I WOULD HAVE TO PAY TAXES ON THE REVERSE MORTGAGE
You already paid taxes on the money when you were putting the equity into your home. When you take it out again, it is not taxable.
THERE ARE BIG OUT-OF POCKET EXPENSES
Most of the costs, whether closing costs or interest, are financed, except for part of the appraisal fee and the counseling fee. That means there are minimal out-of-pocket expenses at any point in the reverse mortgage.
A REVERSE MORTGAGE IS SIMILAR TO A HOME EQUITY LOAN
(a) Home equity loans may have many requirements such as high income, low debt, and good credit that a reverse mortgage does not.
(b) you can "outlive" a home equity loan and end up being foreclosed on by the bank. This can never happen with a reverse mortgage.
reverse mortgage usually has significantly lower interest