How safe are reverse mortgages?
Reverse mortgages are a very safe income option. Borrower(s) continue to own the home. Since the loans are “non-recourse” the lender is limited to the home’s value at the time of repayment. Your heirs are only involved in inheritance, not debt. With a reverse mortgage, you may remain in your home as long as you like. With no mortgage payments to make, this is an enormous relief of the worry of outliving your savings. Reverse mortgages can help you increase retirement income, provide funds for health care, reduce the impact of and provide funding for estate taxes and maximizes legacy asset transfer.
Reverse Mortgages are very safe. Why? • FHA and FannieMae guarantee the payments that are made to you • They also guarantee you can stay in your home as long as you like AND • You (the Borrower) will never owe more than your house is worth Reverse Mortgage Facts • There is no repayment of any kind during the life of the loan until the home is sold or you permanently leave the residence • The Borrower does not have to income or credit qualify • The proceeds are treated as tax-free income • You pay the interest at the time the loan is repaid – not during the loan • At the time the loan becomes due the payable, your heirs can either choose to repay the loan and keep the house, or sell the home and repay. Heirs will also receive the remaining equity, if any, after the sale of the home • Loan does not become due and payable until the last surviving borrower passes away, sells the home or permanently leaves the residence • Homeowner must continue to pay property taxes, homeowner’s insurance
