Blogs in Real Estate

When a reverse mortgage loan is given, many fall under misconceptions such as the possibility of a lost house after the equity is given out. 

Many seniors don’t fully understand reverse mortgages and often have preconceived notions, about how these mortgages work. Seniors with home equity often erroneously think that taking a reverse mortgage may lead to being forced out of their homes or ending up owing more than the house is worth.

The fact is you won’t be forced out of your home. Nor will you (or your heirs) end up owing more than your house is worth. Federal law defines reverse mortgages to be non-recourse loans, which simply means that the home’s value is the only asset that can be tapped to pay the reverse mortgage debt balance. If a home’s value does drop below the amount owed on the reverse mortgage, the lender must absorb the loss.

With this type of security a reverse home mortgage is a great idea.