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It is somehow a miracle, that there are so many wrong myths about the reverse mortgage loan. Maybe this financial product just has so many and so difficult terms, that people start to make stupid questions, which then with the time will turn into the so called truths. If you my reader are starting the process to apply the reverse mortgage loan you will do wise, if you first surf in the net and start to build up your own fact bank and the question list. This is a good way to start collecting solutions for your needs too, because you can also find the alternatives there. 1. If The Loan Capital Exceeds The Value Of The Home, I Will Be In Trouble. No you will not. The reverse mortgage loan will always be taken against the equity of your home. And the borrower has to take the mortgage insurance. That is the law. This means, that your other assets will never be used to pay the reverse loan. 2. The Lender Will Take The Home From Me. The reverse mortgage loan works in the same way as does the usual mortgage. When you borrow money from the lender, the ownership will not change. You will stay as an owner and the lender can never get your home. 3. The Lender Can Sell My Loan And To Change The Terms. The fact is that the terms will never change. Actually in the end all loans end to Fannie Mae. You will sign a legal document saying, that the loan terms will in no cases change. 4. My Heirs Will Have To Pay A Part. This is not true either. When you will move permanently away, die or sell the home, the home will be sold and this money is used to pay back the loan and all expenses. If the selling price will not cover the whole sum, then the mortgage insurance will cover the difference, but never your heirs. 5. The Loan Has Influences On My SS/SSI, Medicare And Medicaid. This is an important topic. The reverse mortgage loan has no influence on these social payments. In the case, that you get The Supplemental Security Income, you must use the proceeds from the reverse loan. To put it simply, you have to spend the monthly cash advances fully and they cannot be accumulated. These terms will vary from state to state, so you better check this topic from your local area agency of aging. 6. The Health Qualifications Are Hard To Meet. They are not hard to meet, because there is no health qualification terms. All citizens, who are American, at least 62 and own a home, where they have equity left, will automatically qualify. 7. My Credit Score And The Incomes Must Be On A Certain Level. It is useful to remember the idea of these loans. They are meant to the citizens, who are cash poor, but equity rich. The product idea is to use a part of the home equity and to turn it into cash money. That is the reason, why the credit score nor the income information is never asked. 8. I Cannot Have Other Debts. If a borrower has an usual mortgage left, he will first pay it away with the reverse loan, so the only mortgage he will have will be the reverse loan. The reverse loan lender is not interested about the other loans, because he will in all cases get his money back from the reverse loan. 9. The Reverse Loan Is Only For Really Poor And Desperate Citizens. No, not at all. The reverse mortgage loan is targeted to American citizens, who have difficult financial situations, which are forecasted to last for several years. These people have met sudden extra costs, like new medical bills, and they cannot clear the situation without the reverse loan. Juhani Tontti, B.Sc., Marketing. Unfortunately the reverse mortgages are surrounded by the many myths. The reverse mortgage counselor can tell you the facts. Visit: reverse mortgage loan
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