Let’s look at the facts to ease your fears:
- A reverse mortgage is a mortgage just like any loan against the home but it has special terms for seniors 62 and older.
- The lender or bank does NOT own the home – YOU OWN THE HOME, you keep the title!
- There are no income or credit score requirements to qualify.
- No monthly payments required.
- There is no limitation on how the funds can be used.
- More options – Funds can be received in monthly payments structured as needed, line of credit (with a growth rate), lump sum, or a combination of these.
- Social Security and Medicare are not affected because it is a loan, not considered income.
- Medicaid (Medical in Minnesota) can still be received with the reverse mortgage.
- Borrowers can stay in the home as long as it is their primary residence or in the case of a couple as long as one borrower is still in the home as their primary residence. The due date on the mortgage is the youngest borrower’s 150th birthday.
- At the time of sale if the home is sold for more than the loan balance, the borrower(s) or their heirs receive the difference. The bank does NOT keep the difference!
Great article about common reverse mortgage misconceptions.
