FAQ: Learn about a Reverse Mortgage in Las Vegas
More Facts on Reverse Loans:
I'M SELLING MY HOUSE TO THE BANK?
You keep the title to your house. The lender will add a lien on the property but you will have complete control over it.
MY HEIRS WON'T INHERIT ANYTHING.
Your estate only owes the balance on the reverse mortgage. The balance is what you have used plus interest. Let's say you owed $50,000 after 5 years. Then you decided to sell the house for $250,000. The lender gets $50,000 and your heirs 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 over 100, you can never owe more than the value of your home and you can never be forced to leave the home.
I COULD GET FORCED OUT OF MY HOME.
FHA/HUD reverse mortgages specifically state that you can not be forced out of 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 are financed into the loan. The only out-of-pocket expenses is for the Counseling fee and the appraisal.
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.
(c) A reverse mortgage usually has
significantly lower interest rates.