Reverse Mortgage Loan Blog

If you’re 62 or older and want or need some extra money, then a reverse mortgage might be for you.

That’s the message Russell Buker is trying to spread throughout the Lakes Region to seniors who are feeling the pinch of the current economic slowdown, or who just want to improve their lifestyles.

“Anybody can get a reverse mortgage loan as long as they own their house,” Buker said recently during a reverse mortgage seminar at the Belknap Mill, and the proceeds can be used for “anything you want,” including a second home.

Proceeds from reverse mortgages can be paid in a lump sum, monthly, as a credit line or a combination of the three. Repayment of the reverse mortgage is due when the applicant no longer uses the mortgaged property as their primary domicile, when, as Buker noted, “You permanently leave your house,” due to relocation to a nursing home, to another residence or death.

Reverse mortgages have been around for about 10 years, said Buker, but have become prominent in the last 3-4 years. He added, however, that they remain misunderstood and some people fear them because they sound “too good to be true.”

“A lot of seniors are literally in debt,” he said, and a reverse mortgage could be a good way out for them.

In response to the “negativism” surrounding reverse mortgages, Buker holds occasional seminars on the subject and he hands out a pamphlet that corrects eight of the “myths” behind reverse mortgages.

Among the myths the pamphlet addresses are that “you sell your house to the bank” when the reality is that “you always keep title of your house and have complete control over it.”

Also, you cannot be forced from your home, nor do you have to be debt-free to qualify for a reverse mortgage. Homeowners can get a reverse mortgage but must first pay off any current mortgages or debts.

There are no income qualifications to obtain a reverse mortgage, which is based on the applicant’s age, value of their home, amount of equity in the home and current interest rates.

Money received under a reverse mortgage is considered a loan, not income, meaning that an applicant’s Medicare and Social Security benefits will not be affected.

Heirs to a property that has a reverse mortgage on it can repay the loan when it becomes due or sell the property and use the money to repay the reverse mortgage.

Also, there are no monthly payments and reverse mortgages can be obtained for condominiums, multi-family dwellings as well as manufactured housing.

Found here.

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