As much as there is positive feedback, contradictions, or myths about reverse mortgages, misconceptions can also be found. This is not surprising, considering what is involved in this financial program. Basically, it is the acquisition of monthly cash flow in addition to the monthly retirement income received by senior citizens 62 years old and above.

What are some misconceptions of reverse mortgages?

The Bank Owns Your Home

Firstly, there’s the belief that the bank owns your home the moment you avail of the reverse mortgage loan. This is not the case. The truth is your home is yours as long as you remember these three things.

• First, you are living in it.
• Second, you are paying your insurance and property taxes.
• Third, you are maintaining it in good, reasonable living conditions.

Additionally, you can cover those expenses using the monthly cash flow you get from the reverse mortgage.

Read More Reverse Mortgages: What Are Some of the Most Common Misconceptions?

There are a lot of misconceptions about the terms associated with reverse mortgages. Even with the recommendations provided by the American Association of Retired Persons (AARP), a lot of seniors still worry. Their concerns come from applying for a reverse mortgage loan. Things become worse when their loved ones or friends say that this type of loan is nothing but bad news. Even though they can’t provide any credible information to back up their claim.

Common Myths About Reverse Mortgages

There are many misconceptions regarding a reverse mortgage. One example is that it tends to result into houses being repossessed from the borrowers. This isn’t true. As a matter of fact, the senior borrower would still own the house that’s under the loan program. This ownership is protected by the lien that’s put on the property, just like other types of mortgages. It will guarantee that the lender will be repaid for the owed amount, getting rid of the threat of having the house repossessed.

Read More Reverse Mortgages: Common Myths Debunked