HECM (Home Equity Conversion Mortgages) reverse mortgages have been growing in popularity over the past few years especially after the recession occurred. Mainly due to the unique features and benefits, borrowers are offered this type of loan. HECM reverse mortgages are not the same as the traditional one that the majority of seniors are aware of. Unfortunately, due to a lack of proper information, many negative myths have reached the media. But the truth is that this reverse mortgage is a valuable tool to many seniors, and it has already helped many.
In this current situation, fiction needs to be separated from fact for you to fully appreciate all the benefits of HECM reverse mortgages. This is why it is highly suggested to meet with a specialist or to contact one with your list of questions.
Facts vs. Fiction
Some people believe you lose ownership of your home with HECM reverse mortgages. This is no true. As long as you honor your terms of the loans, such as residing in the residence, paying homeowner’s insurance and property taxes, you will maintain ownership and the title of your home.
One common belief is that heirs will lose their inheritance if a reverse mortgage was taken out on the home. This is not the case. At the time of the loans maturity, your heirs have different options to repay the loan. They may sell the home to pay it and keep what cash is left after repayment, or they can keep it and pay off the loan in another way, such as refinancing the loan into a traditional mortgage.
Many seniors fear they will lose their pension, Social Security, and Medicare by taking HECM reverse mortgages, but this is not the case at all. However, other types of income awards might be affected by it, such as Supplemental Security Income (SSI). Always speak with a financial advisor before signing any loan documents.
After you understand the truth about HECM reverse mortgages, it is easy to see why so many seniors are using this for financial stability during retirement. Browse the website for more information.