Many Seniors and their financial advisors believe that once you close on your reverse mortgage the lender owns the home.
You never forfeit title to your home, and you retain all rights to determining who will inherit your home on your passing.

Misconception 2

Many believe that there is a set period of time after which the loan must be repaid, or that if one of the homeowners should leave the home or pass before the other that the loan becomes due.
As long as one of the homeowners continues to occupy the home as a primary residence, regardless of the status of the spouse, there is no time limit to how long the remaining homeowner my remain in the home.

Misconception 3

Many Seniors have avoided a reverse mortgage because they thought the proceeds were considered income and would be taxed.
The IRS has ruled that proceeds from a reverse mortgage are equity advances – not income. As a result the proceeds are not taxable and have no affect on your Social Security or Medicare benefits.

Misconception 4

The home must be free and clear.
The home does not need to be free and clear. Reverse mortgage proceeds will be used to pay off existing mortgages, and eliminate those payments. Elimination of the current mortgage is one of the most common reasons seniors apply for a reverse mortgage.

Misconception 5

Since I never make a payment, over time the interest will eat up all my equity nothing will be left to leave my heirs.
Due to the low interest rates, the appreciation in the home, and how the interest is assessed, substantial equity in the home remains untouched, and 100% of the excess equity belongs to the homeowner, their heirs or estate.

Misconception 6

A reverse mortgage is very costly.
The 2% FHA Mortgage Insurance paid as part of a government insured reverse mortgage does elevate the cost. However, none of the fees are paid out-of-pocket, and once you understand how and when the fees are paid, and the value for your dollars, the cost is seldom a factor in a senior’s decision.

Misconception 7

Only seniors who are house rich and cash poor use reverse mortgages.
Some of the highest net worth seniors in the country are applying for reverse mortgages. Estate planners and wealth management professionals have discovered many ways to use the tax free proceeds from a reverse mortgage in creative estate planning.

Misconception 8

A reverse mortgage cannot be used to purchase a home.
We have helped many seniors purchase more home than they thought they could afford with their available cash. In fact they can usually purchase twice the home they expected, and with no mortgage payments for life.