A reverse mortgage is a unique product that is available to homeowners who are at least 62 years of age. These products have become recently popular throughout different news outlets and not always for the best reason. There are many misconceptions associated with these products and it is important to get correct reverse mortgage information before proceeding.
Reverse Mortgage Misconception 1
Many people believe that obtaining a reverse mortgage means giving up title to their home. This is completely false. Though monthly mortgage payments are never required with this type of loan, the title to the home remains in the name of the homeowner for as long as they occupy the residence.
Reverse Mortgage Misconception 2
Another commonly touted myth is that reverse mortgages are outrageously expensive. Though this may have been true in the past, they are now quite affordable. The largest fee is paid directly to the Federal Housing Administration for insuring the loan. For those people interested in lowering this fee, there is a new variation of the federally-insured reverse mortgage which boasts a lower fee, but allows the homeowner access to a lesser percentage of their equity.
Reverse Mortgage Misconception 3
One of the most important things to understand about this financial product is that you can never owe more than your home is worth. It is a non-recourse product which means that any balance that is owed greater than your home's value will be reimbursed to the lender by the FHA.
Visit Senior Reverse Mortgage for more information on reverse mortgages.