How Great Would Your Retirement Be If You Had... No Mortgage Payment?

You remain the owner of your home.

A common misconception of reverse mortgages is that the lender takes ownership of your home. This is false. You continue to maintain ownership of your home, as long as you comply with the terms of the loan and pay your taxes and insurance.

There are no monthly mortgage payments required from you.

One of the most attractive benefits of reverse mortgages is that payments are made TO you, as long as you live in your home. This is quite different from a traditional forward mortgage where you must pay funds in a monthly amount. With reverse mortgages, you receive funds. The loan is repaid when you sell your home, move to another primary residence, or when the last borrower leaves the home.

You are protected if the housing market declines.

The reverse mortgage loan is insured by the federal government. With federal insurance comes greater security. If the loan ends up amounting to more than the value of the home when sold, government insurance will cover the difference. This means that the loan will be paid in full using only the proceeds your home sells for, and no more.

You may choose from several options of disbursement.

Each individual senior has different needs. Thus, there are different disbursement options to cover different needs. This includes the choice to receive funds in a full or partial sum, a line of credit, monthly payments, or a combination of any of these.

Social Security and Medicare benefits are unaffected.

Government benefit programs that do not test financial resources, such as Social Security and Medicare, are not affected by reverse mortgages. Reverse mortgages are considered loan proceeds and not income. Do note, however, that income awards such as Medicaid and Supplemental Security Income may be affected.