Search:

Ten Myths about Wisconsin Reverse Mortgages

With the recent wave of Wisconsin Reverse Mortgages happening there is a lot of misinformation out there. I have heard of some really bad reasons not to take out a reverse mortgage and decided it was time to write about some of them. Please remember reverse mortgages aren't for everyone but make sure the reason you aren't investigating them is not on this list. If you haven't even looked at a Wisconsin reverse mortgage for any of these reasons please take another look, it might work for you.

1. When taking out a reverse mortgage I no longer own the house my bank does. This is untrue because you are kept on the title as owner of the property. As a matter of fact the bank can't foreclose on you like a forward mortgage. You live in the house as long as you can and will always own the property till you decide to sell. like a regular mortgage the bank will place a lien on the house to insure it get paid off but you maintain complete control of the house.

2. My children won't get anything when I pass. Your estate only owes as much a the mortgage balance is at the time of payoff. The payoff is however much you have spent plus interest. Any equity that is left over is passed on to your heirs. the bank does not get too keep any of this extra equity. As an easy example if you owe 25,000 on the reverse mortgage and the house os worth 125,000 and it was sold. You would get the extra 100,000 not the bank or anyone else. The lender would get paid there 25,000 they have given you.

3. I could get forced out of my home by my bank. FHA/HUD reverse mortgages specifically state that you can not be forced out of your home.

4. Social Security and Medicare will be affected by the money I receive from the reverse mortgage. This money is actually considered a loan and not income. For this reason a reverse mortgage does not lower Social Security or Medicare benefits like some want you to think.

5. I must have really good credit and income to qualify for a reverse mortgage. Actually it is a lot easier to qualify for a reverse mortgage than a forward mortgage that you have had in the past. Since there are no payments you don't need income to qualify. As for credit the only thing that is looked at is if you are currently going through a bankruptcy you may not qualify. If you have bad credit you will still qualify for a reverse mortgage.

6. My home must be free and clear with no mortgages to be able to get a reverse mortgage. No, you can have a mortgage and still qualify for a reverse mortgage. You will pay off the current mortgage with your new reverse mortgage and will be getting rid of the previous mortgage payment. You must have enough equity to pay the mortgage off completely and you will have to use some of your available cash to do so.

7. There are large out-of-pocket expenses which make it hard for seniors to get the loan. All of the costs, whether closing costs or interest, are financed. That means there are few out-of-pocket expenses at any point in the reverse mortgage.

8. Reverse mortgage interest rates are higher than a regular mortgage. This is just not the case. In most cases the reverse mortgage has a lower rate than the current conforming fixed rate. The HECM product's interest rate is set by the Federal government.

9. I might "outlive" the loan (don't we all wish for that?). FHA/HUD reverse mortgages are designed specifically so that you can't outlive the loan. When you get the reverse mortgage, the lender will charge you 2% to purchase mandatory FHA mortgage insurance. That insurance guarantees that even if you live to be 100, you can never owe more than the value of your home and you can never be forced to leave.

10. A reverse mortgage is like a home equity loan. First, home equity loans may have many requirements such as high income, low debt, and good credit that a reverse mortgage does not. Second, you can "outlive" a home equity loan and end up being foreclosed on by the bank. This can never happen with a reverse mortgage. Third, a reverse mortgage usually has significantly lower interest rates.

Those were ten of the biggest misconceptions out there about reverse mortgages. I am sure I missed some but the key is get with a good reverse mortgage expert and they will be able to answer your questions. There are many resources that will help educate, I suggest you do some reading!

Article Source: http://www.newagelivingarticles.com

David Forer is an expert author on credit help, debt settlement, and reverse mortgages for seniors. If you are considering a Reverse Mortgage or need financial heIp; I would recommend getting his free informational e book at Wisconsin Reverse Mortgage

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Finances Articles Via RSS!

Additional Articles From - Home | Finances

Article Directory Software
Click here to download the exact software that powers this directory for FREE. Start your own article directory today!

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Top Authors
Submit Articles
Member Login
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds

Little Book Of Becoming
Masters of the Secret
The Singularity Is Near
Distribute Your Articles to 1000's!
Wildwind Enterprises
Bookstore
About Us
Link to Us
Contact Us
Privacy Policy
Terms of Service

LINKS

All Links DirectoryAll Links Directory is 100% SEO friendly Directory and Human Edited.

Dominate The Search Engines with this software

Make Money Being an Affiliate with this software it's easy!

Learn How to Make Daily Profits Online starting Right Now!

Idiot Proof Clickbank Trick Makes $6,513 In 24 Hours

Amazing New Discovery: True psychokinesis easy to Use. Learn to control it for manifestation, healing, karmic repair with chakras.Visit us to find out how This Is 'PK' Mind Over Matter (Ebook, Free Download) fosters positive permanent change!

Submit Your Articles Quick and Easy with this software!

Get Keyword Elite and never hunt for keywords again!

NewAgeLivingArticles.com » Copyright © 2007-2009 WildWind Enterprises
Terms of Service | Submission Guidelines | Contact Us | Link to Us| Privacy Policy | About Us | Article Submissions With A Click 100's of Sites!