“I called to ask questions about accessing the equity in my home to help me cover my monthly expenses, but my son was not in favor of it. Of course, he doesn’t live with me, and he doesn’t pay my bills. He just thought it was a bad idea. I asked him to talk to my loan officer who was able to meet all of his objections. I am so glad that I didn’t just stop when my son said he didn’t like it!”
This scenario is repeated daily as well-meaning children, who are not updated on the important changes that the US Government has put into place in recent years to make home equity loans safe for senior borrowers, prevent their parents from moving forward with a transaction that would truly benefit them. Misinformation about reverse mortgages abounds, and so it is necessary to ask the tough questions and get accurate information.
The first objection that is often made is, “Mom, the bank will own your home!” Actually, that is not true. Mom never gives up title to her home, and the lender does not slowing gain possession.
“But Dad, there will be no inheritance for us kids!” This sometimes comes from children who do not realize that the property can be willed to the kids. With the government safeguards now in place including lower lending limits and reduced mortgage insurance costs, the loan balance grows more slowly. The heirs can decide to refinance or sell the home as they choose.
Since the federal government insures a reverse mortgage, no one will ever owe more than the value of the home. Once the mortgage is satisfied, the heirs will receive the additional proceeds from the sale, if they have not refinanced.
Many times seniors have worked all their lives to provide for their families. They have made hard choices, and paid off the mortgage on their home. Rather than struggling to have funds to pay the bills in retirement, they can now unlock the equity in their home, and provide for a more secure financial life in their golden years.
Contact your local Reverse Mortgage Specialist for additional information that will help you make a wise choice for financial security in your retirement.
This article first appeared in My Primetime News, May 1, 2018.