1. I would be selling my house to the bank
FALSE You keep the title to your house. The lender will add a lien on the property but you will still have complete control over it.
2. My heirs won’t inherit anything
FALSE Your estate only owes the balance on the reverse mortgage. The balance is however much you’ve spent and interest.
3. I might “outlive” the loan
FALSE 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 out of your home.
4. Social Security and Medicare will be affected
FALSE 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.
5. I would have to pay taxes on the reverse mortgage
FALSE 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.
6. There are big out-of-pocket expenses
FALSE All of the costs, whether closing costs or interest, are financed. That means there are never out-of-pocket expenses at any point in the reverse mortgage except the appraisal.
Call me to determine how much tax free cash you may qualify for. Ray Antonelli; 216 337 7520.
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