Myth: The lender will take ownership of my home.
Fact: This is false. You or your heirs continue to retain ownership of your home even after obtaining a reverse mortgage. The lender does not take control of the title. When the loan becomes due, the lender's interest is limited to the outstanding loan balance.
Myth: The reverse mortgage requires that I make monthly payments.
Fact: This is not true. There are never monthly mortgage payments with a reverse mortgage. The borrower is responsible for payment of property taxes, insurance, general upkeep of the home, and nothing more.
Myth: My children will be held responsible for repayment of a reverse mortgage.
Fact: False. The reverse mortgage is a non-recourse loan, which means that no matter the size of the outstanding balance, you or your heirs will never owe more than the value of the home, even if the loan balance exceeds the home value.
Myth: I need a certain level of income, credit, or health to qualify.
Fact: This is false. A reverse mortgage has no income, credit, or health requirements. To be eligible, all homeowners on the title must be at least 62 years old.
Myth: To qualify, my traditional home mortgage must be paid off.
Fact: Not True. Your home does not have to be paid off to be eligible. You may have an existing mortgage or other debt on your home. When you receive a reverse mortgage, any existing mortgage is paid back first with the proceeds of the reverse mortgage, allowing you to be finished with your monthly mortgage payment forever.
Myth: Reverse mortgage lenders will sell my house.
Fact: False. Golden Gateway Financial and our lenders are in the business of helping you keep your home and maintain financial independence. Once you choose a reverse mortgage, you may remain in your home as long as you wish. Only when you decide to move or sell your home, or if you pass away, does the loan balance become due.
Myth: If I do a reverse mortgage, I won't have anything left for my kids to inherit.
Fact: This is not necessarily true. Depending on how much you borrow, your age, your actual home appreciation, and the principal limit, you may still be able to pass on money to your heirs. While you live in your home, your property will continue to appreciate, and you will only owe the lender the amount you borrow plus interest. If the amount you owe is less than your property value at the time your loan becomes due, your heirs may inherit the difference. Your heirs also have the option of choosing to convert the reverse mortgage into a traditional mortgage, if they would like to keep your home. Please
consult your representative for more information.
Myth: If I get a reverse mortgage, I cannot sell my home.
Fact: False. You may decide to sell your home at any time with no pre-payment penalties or restrictions. If you do decide to sell your home, your reverse mortgage will become due, and the loan balance must be paid.
Myth: If my lender changes, my loan terms can change.
Fact: This is not true. With a reverse mortgage, loan terms cannot be changed by a new lender. A reverse mortgage is secured by two deeds of trust. Once executed, the terms are set and cannot be changed as long as the deeds remain in force.
Myth: My Social Security and Medicare benefits will decrease.
Fact: This is not true in most cases. Generally, the money from a reverse mortgage is considered borrowed money, not income, and does not affect government benefits. Please consult with an advisor for your specific situation.
