Reverse Mortgage Concerns

Seniors considering reverse mortgages undoubtedly have concerns that must be addressed in order to feel comfortable about moving forward with an application for a reverse mortgage loan. Some top concerns that are often expressed are:

If I Get A Reverse Mortgage I Could Lose My House

This is one of the most common concerns among seniors and their families when first considering reverse mortgages.  However, the truth is that you absolutely CANNOT LOSE YOUR HOUSE just because you have a reverse mortgage.  You retain title to your home until you or your heirs sell the home.  The bank does NOT own or take title to your home.  While you have a reverse mortgage you continue to be responsible for maintaining your property, and paying your property taxes and insurance just as usual.

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If I Outlive My Life Expectancy The Lender Will Evict Me

Once again, this is one of the concerns that is completely unfounded.  No matter how much money the lender pays out to you over your lifetime you will never be forced from your home. You could live to be 120 and receive far more in payments from the lender than your home is worth, but you will never be evicted or forced to sell your home to pay off the debt. The house stands alone for the reverse mortgage loan balance.  This may sound too good to be true, but it is true.  The mortgage insurance premium that is included in the cost to obtain the loan is what covers the lender in case of any shortfall when the home is sold and the loan is repaid.

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I Will Have Tax Consequences If I Take Out A Reverse Mortgage

This is another one of the concerns that many people have before they really investigate the facts about reverse mortgages. Once investigated, you will find that since the income you receive from your reverse mortgage is actually your money in the first place it is not considered taxable income. This is an asset that you have accumulated through years of paying off your mortgage with earnings that were all ready taxed before you made the payments to the lender.  Not only is the money from a reverse mortgage tax

free, but it does not affect your Social Security or Medicare benefits. However, if you are on disability, Medicaid or other entitlement programs your benefits could be affected.  You should consult with an advisor before structuring a reverse mortgage.

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