We’ve been getting a lot of questions sent in for Watch-It Wednesday about reverse mortgages. There seems to be a lot of uncertainty and misconceptions about this type of mortgage. So, we went to our resident reverse mortgage expert, Jen Horvat, to clear up the confusion. Take a look:
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Hi, my name is Jen Horvat and I’m the Director of Marketing with One Reverse Mortgage. I’m here today to tell you a little bit more about One Reverse Mortgage: The product itself and also answer a ton of misconceptions that are out there in the media around reverse mortgage or what’s commonly called the home equity conversion mortgage.
A reverse mortgage in its simplest form truly is a home equity loan but better. There’s no monthly mortgage payments, it’s a non-recourse loan which means that the senior will never owe more than the home is worth and it’s a typical loan that’s going to take the equity in your home and turn it into tax-free cash.
Some common misconceptions from the media are: Number 1 – they always think that the bank is going to take your home. The reality is that this is just another type of mortgage and the bank is not going to take your home. It works just like a traditional mortgage where you’ll owe the bank when you no longer live in that home.
Another common misconception is that we’re going to take the title. Again, we don’t want the title to your home. We simply want to give you a home equity loan that’s going to help you pay your bills and help you live a better retirement.
And I’d say that the third common misconception is that “I’m going to owe more than the house is worth at the end” or “I’m going to leave a huge debt for my heirs”. The reality is when you no longer live in that home, you sell the home. If the home sells for less than its worth the rest is forgiven by the government because its an FHA insured loan.
Simple as that.
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