What have you heard about Reverse Mortgages? In this brief highlight, Pete Tentler of Liberty Home Equity dispels 2 common misconceptions about Reverse Mortgages. The interview was conducted by Bill Black, The Exit Coach, on The Exit Coach Radio Show - the Information Station for Baby Boomer Business Owners contemplating Business Succession and Exit Planning.
Pete: Many believe that when you obtain a reverse mortgage, the lender owns the home. However, this is not true. The borrower's will retain the title and ownership during the life of the loan, and they can sell their home at any time. The loan will not become due as long as the borrower continues to meet loan obligations, such as living in their home as their primary residence, maintaining the home according to the FHA requirements, and paying property taxes and homeowner's insurance, just like you normally would.
Bill: I had heard one time that home equity conversion mortgage means that they lose the home when they die. Now, is that correct, or is that wrong?
Pete: That's wrong. This is another common misconception. Their heirs can sell the home to pay off the loan or keep the home by paying off the loan, balance in full. So, they can live in the home for as long as they desire, and at no time can we say, "hey, time for you to move out." As long as they maintain the property as their primary residence, and pay their property taxes and insurance, they can live in the home forever.
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