Home Mortgage Refinancing Guide

There is a lot of confusion in the marketplace today regarding reverse mortgages. With this confusion come misconceptions. Here are several common Reverse Mortgage misconceptions: First, that you’ll lose your home; evil banks will take over your deed to the house. Second, your grandparents will be thrown out in the street. Third, your mortgage lender can take not only your house, but all of your household stuff as well. Reverse mortgages have had a lot of publicity recently due to overvaluation in the housing market, and the fact that many retirees haven’t saved a dime for their retirement.

The question becomes how can you take money out of your house, and not lose it? One way is a reverse mortgage, that is borrowing against your home. Instead of paying the mortgage lender, with this type of mortgage loan the lender pays you. The most popular type of Reverse Mortgage is the Department of Housing and Urban Development Home Equity Conversion Mortgage. Seniors age 62 and above can borrow a line of credit, take a lump sum or a regular monthly income as long as they live in the home. Lines of credit seem to be the most popular; this is because borrowers do not pay interest until taking the money out. This income is not taxable; it is simply a loan. For the most part, this loan is due when the borrower sells, moves, or dies. For many seniors today, this type of loan is a godsend. One of the risks however, with taking out a Reverse Mortgage is this: say the owner leaves the home for 12 months to enter a nursing home; the loan is now due. There are other considerations as well.

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