Myths and Realities of a Reverse Mortgage


 

Myths & Realities of
The NEW Reverse Mortgage

As with many financial products, you may have heard a number of misconceptions about reverse mortgages and how they work. Do you know the myths vs. the realities?
 

 

 

Myth # 1: The lender owns the home

  Reality: Borrower retains title to home, no one is added

Myth #2: The home must be free and clear of existing liens

  Reality: HECM designed to pay off existing liens

Myth #3: Loan proceeds are taxed

  Reality: HECM proceeds are not income, therefore not taxed

Myth #4: There are restrictions on how to use proceeds

  Reality: Any proceeds remaining after paying off liens can be used however the borrower wants, no restrictions

Myth #5: Only poor people need HECMs

  Reality: HECMs provide an opportunity to diversify a portfolio and help ensure against overdrawing existing retirement assets

 

 

 
 


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