Fiction: With a reverse mortgage you are selling your house to the bank.
FACT: Homeowners never give up the title or ownership of their home. This is just a mortgage like any other mortgage. It is just a loan using the home as collateral. Simply speaking...think of this for now as a mortgage like any other that you may have had, except you have the right not to make payments for as many months as you wish. And for those months the interest portion of the payment will be added to the loan.
Fiction: Reverse mortgages are costly and have high fees.
FACT: Interest rates are comparable to conventional Federal Housing Administration (FHA) rates and fees vary by lender. Sometimes there are virtually no closing costs with one exception. There is a insurance fee that is unique to a HECM that guarantees that this is a non-recourse loan. Our company works with eleven different reverse companies with fifteen different programs to design the best programs to solve your problems.
Fiction: If the home loan balance grows bigger than the home value, the borrower is on the hook for the difference.
FACT: All reverse mortgages are non-recourse loans, and a borrower, the estate, the children or the trust will never owe the lender more than the current value of the home. The way these loans are currently designed, it is usual and customary that there are substantial assets for inheritance from the family home after the home owners die, or if they decide to sell the home while still alive and downsize.
Fiction: All reverse mortgage funds that you receive need to be explained, justified and approved for use by the lender, the Federal Housing Administration (FHA) and the Department of Housing and Urban Development (HUD).
FACT: There are no restrictions, approvals, explanations or reporting required. Funds may be used for any purpose, at will, without justification. Currently, all types of reverse loan proceeds are received tax-free and do not need to be claimed on your tax returns. After you receive your funds, you can consult with a trusted advisor and make any decisions you wish about how you spend, preserve or invest your loan proceeds.
Fiction: You must own your home free and clear to qualify for a reverse mortgage.
FACT: This is absolutely not true. You can have a current mortgage or two that are paid off at the closing of the HECM or Portfolio reverse mortgage. There are also LESS programs that may not require you to pay off your mortgage at all. It all depends on the facts of your situation.
Fiction: Reverse mortgages are a loan of last resort. They are only for people in desperate financial conditions.
FACT: Many people use a HECM Line of Credit as a safety net to draw on in case of emergency. In addition, it is now possible to get a Portfolio reverse mortgage up to six million dollars. Many people use this money to invest and create retirement income, as well as use the HECM to pay for property taxes and home repairs. Reverse loans are now being used in sophisticated retirement planning and asset protection programs. They are a hedge against portfolio drops due to a Bear Stock Market or used to delay taking Social Security benefits till age 70. Even used to help make a home impervious to slip-and-fall lawsuits. Call us to discuss the particulars of your situation.
Fiction: There are few if any differences between a HECMLOC (Home Equity Conversion Mortgage Line Of Credit) and a HELOC (Home Equity Line of Credit).
FACT: They are entirely different except that they are both lines of credit that use your home as collateral for the loan. Most importantly, once in place a reverse line of credit is no longer tied to the value of your home. Therefore the lender cannot call, cancel or reduce the line of credit, even if the value of your home decrease.
Let us separate fact from fiction and Reverse Your Thinking® about reverse mortgages!
Marc came to my rescue. He structured the Jumbo-Reverse loan so I was able to set aside $1,000,000 towards monthly income.
He made sure my appraisal came in at full value. Now I will be able to stay here for the rest of my life. He is the best at what he does. Call him!
– David H, Beverly Hills, CA
Marc did a great job getting me qualified so I could use a reverse mortgage-for- purchase to buy my retirement home. He overcame many financial obstacles on my behalf and succeeded where others would have failed. I’ve actually come to think of him as a loyal friend.
– Gloria L, Tucson, AZ
Marc did a financial analysis for me and showed me how I was going to run out of money in 6 months. He was honest and he structured a reverse mortgage for me that not only cleaned up my bills, but also fixed up my house and gave me time to sell my business. Today I am debt free, my stress is down and my health and quality of life is better thanks to him.
– Paul Z, Lake Arrowhead, CA
Marc got me a reverse mortgage on my mobile home. My taxes are paid, my bills are paid off, and I have a car that is reliable and money in the bank. He did a great job and he is a nice guy.
– Johnny P. Camarillo, CA