Reverse Mortgage Objections

Many senior homeowners have heard about reverse mortgage loans but may have some misconceptions about how it works. All it takes a little bit of research to understand the pros and cons of a reverse mortgage.

I Have to Sell My Home

This is not true.  With a reverse mortgage, you are taking out a loan, you are not selling your home.  In fact, a reverse mortgage actually allows you to stay in your home and age in place.1

Reverse Mortgages Are Too Expensive

Just as with any other loan, a reverse mortgage loan has closing fees and interest charges that can vary.  However, many of these up-front costs can be financed into the loan.  This unique feature can make it even easier to afford a reverse mortgage as it limits your out-of-pocket expenses.

I Want My Heirs To Inherit My Home

That is great news and is possible even if you decide to get a reverse mortgage.  If your heirs or estate want to keep the home, they will need to pay off the loan. If your heirs don’t want the house, they can sell the home and receive any remaining sales proceeds after paying off the loan.

The Amount I Am Able To Receive Is Too Little

Restrictions were put in place to deter borrowers from converting too much of their home equity into cash up-front.  This is actually beneficial for the borrower as they are protecting their equity reserves.  Keep in mind, as a borrower you have the option of establishing a line of credit.  And with the reverse mortgage line of credit feature2, it will actually grow over time allowing you additional access to proceeds.

I Heard It’s Not A Good Idea

A reverse mortgage is a versatile tool that can be used to help with many different needs.  It can help to diversify retirement investment portfolios, supplement retirement income, or to put aside funds for when you need it. However, it isn’t for everyone.  If you are planning on moving within a year or two, the closing costs associated with a reverse mortgage, may not be worth it.

Are you interested in learning if you can benefit from a reverse mortgage?  Call 800.976.6211 to speak with a licensed reverse mortgage loan advisor.

Important Disclosures:

1 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

2 The reverse mortgage loan balance grows at the same rate as the available line of credit. Line of credit growth occurs and is only a benefit when a portion of the line of credit is not used. The unused line of credit grows over time and more funds become available during the life of the loan.