Reverse mortgages can be a great way for seniors to live the life they deserve. If you meet the qualifications, the payments from a reverse mortgage can help maintain your quality of life or even provide enough "income" that you can do all the things you've always thought you'd do in your retirement years. Unfortunately, due to the poorly-designed reverse mortgages from 20 years ago, there are quite a few myths surrounding this form of lending. These misconceptions often keep seniors from taking advantage of these loans. Below are the biggest misconceptions followed by the truths surround those beliefs: Misconception #1 - The lender gets your house. This is the most common myth concerning reverse mortgages. The truth is that you keep ownership of …show more content…
We all know how embarrassing that can be. However, with a reverse mortgage you can never be denied because of bad credit. In fact, your credit rating isn't even a consideration for approval. The only reason the lender even runs a credit report is to make sure you don't owe the government any back taxes. If you do, normally you'd just use a portion of the reverse mortgage to pay those taxes before your start drawing money for yourself. Misconception #4 - You have to be completely debt free. You have to own a home to quality for a reverse mortgage, but even if you still owe something on it, as long as you have a significant equity in your home, you don't have to have it completely paid off. The lender will calculate how much they can let you borrow and then they will subtract the amount you still owe. Again, your new reverse mortgage would first pay off the existing mortgage then your payments could start - payments that you can use for anything you wish. This might be the first time in your life that you haven't had house payments. Misconception #5 - The only people who get reverse mortgages are those in desperate