There are many myths in today’s market fueled by stories of the reverse mortgages of the past. The most common misconception is that you will have to give up ownership of your home to the lender upon passing away, or that with time you may be forced to move from the home or start making payments on the money borrowed. It’s been decades since those types of reverse mortgages were utilized, but that past still haunts seniors today who fear the unknown about these mortgages. The fact is that reverse mortgages are a safe and secure way to improve your lifestyle without ever giving up the ownership or equity in your home. The benefits to a reverse mortgage are many, and the drawbacks are few. However, full preparation and planning is a must as you decide what is right for you.

The money received from a reverse mortgage comes from a loan you take against your home’s equity and is not considered taxable income. As a result you get the full benefit of these funds without giving any part of them to Uncle Sam.

Your home doesn’t have to be paid off in order to take out a reverse mortgage. In fact, you can use the proceeds of a reverse mortgage to pay off an existing home loan. This frees up money to put toward other expenses.

Brad Thomson

A reverse mortgage is a loan that enables senior homeowners, ages 62 and older to convert part of their home equity into tax-free income – without having to sell their home, give up title to it, or make required monthly mortgage payments. FHA insures that you will never lose ownership or be forced to make payments or move from the home as long as you choose to live there. Further, the title to your home stays in your name until you chose to move or you pass away. At that time the mortgage and accrued interest is paid in full and the remaining equity is disbursed to you and/or your heirs. Because there are no payments associated with these loans, the program only allows a certain percentage of the home’s value to be borrowed, thereby ensuring there is always equity in the home. The percentage you may borrow is dependent on your age and the location of the property.

A reverse mortgage allows seniors to tap into money they’ve earned in the form of home equity, and in some cases avoiding having to depend on others for financial assistance. The money you get from the reverse mortgage is yours to use as you please. Do you have medical bills? Do you need to upgrade your home to fit physical needs? Maybe you just want to finally be able to travel and have more security – the decision is yours. With these funds you may live a better lifestyle without giving up your home ownership.