Coastal Reverse Mortgage Blog

Freedom from Financial Worry

  

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This could well be the beginning of your new, financially independent life. Simply by reading this article, you've taken a proactive step towards ensuring a safe, stress-free retirement by using the equity in your home. Once you decide to get a reverse mortgage quote, you are on your way!

Understanding Reverse Mortgages

People tend to shy away from the idea of reverse mortgages, in part because of their former bad reputation, and in part because of the difficult terminology. Although they were revamped and vastly improved in the past 20 years, people still tend to think of them as a poor choice for seniors. Here are some common misconceptions:

• The lender gets your house. This is by far the most widely misunderstood fallacy about reverse mortgages. In fact, you keep ownership of your home. The lender has no rights to your home and can't foreclose on you as long as you keep up with your taxes and insurance.
• You won't qualify because of poor credit. If you have bad credit, or even moderate credit, you may have been turned down for a loan in the past. It's embarrassing, frustrating, and inconvenient. Reverse mortgages work differently - borrowers are rarely denied a loan because of bad credit.
• You have to be debt free. While you are required to own a home in order to get a reverse mortgage, you do not have to own it "free and clear." The reverse mortgage proceeds can be used to pay off your remaining forward mortgage, leaving you without house payments.
• Only the desperate get reverse mortgages. Today's reverse mortgage borrower is more likely to get a loan out of want, rather than need. People who have no immediate need are taking out these loans because they like the security of having a financial cushion, or are planning for future expenses.

(photo by ammgramm)