I recently met with Elaine Parker ( http://www.elaine-parker.com/ ), who has been workingwith Reverse Mortgages for 18 years, and is pretty much an expert on thefield. What she explained to me wasenlightening and I asked her to send me information to share. She vowed to keep sending me tidbits so Iwill continue to share! Here is the secondone.
There aremany misconceptions surrounding the Reverse Mortgage program. In the comingdays I will clear up what I consider the TOP 10.
Reverse Mortgage Myth #2:
It's not safe. You are giving up title to your property - OR - the "bank gets your house".
The Reverse is a mortgage. Title remains with the borrower (or intheir Living Trust ). The difference in this mortgage isthat there is no monthly payment obligation. When the borrower permenantlyleaves the home the house goes to the heirs - the mortgage must then bepaid off either through refinance or sale. The obligation that theborrowers have in a reverse mortgage is to:
1) live in the home as their primary residence, 2) pay their propertytaxes, 3) maintain their homeowners insurance, and 4) maintain theproperty. In other words, everything they are already doing! I often remind my clients that the property tax bill goes to the owner of theproperty and they will continue to receive it.