Today we interview Bill Cave and he breaks down the myths about HECM/Reverse Mortgages.

In the early 1960s, when reverse mortgage loans were first introduced, they did not have any government
programs backing it. It wasn’t until 1983 when the Senate approved the proposal of having the Federal Housing
Administration (FHA) to insure reverse mortgages. The Federal Housing Administration has been guaranteeing
HECM mortgages ever since it was passed into law in 1988 by President Reagan. Since then FHA and HUD
have made many amendments to the program to improve consumer protections.
It is our job to give you the best education available with the most up-to-date facts so you can make a bright
and educated decision. Our Reverse Mortgage Planners are well trained and very experienced with a variety of
senior, real estate, and retirement issues so you can feel much more secure about making a decision with one
of your most valuable assets: your home. Some of the most common myths that we hear are below.
Most, but not all, reverse mortgages today are federally insured through the Federal Housing Administration’s Home Equity Conversion
Mortgage (HECM) Program. This blog talks about HECM loans only.

#1 MYTH: I could lose my house and be forced to move.
FACT: As long as all loan terms are met, you cannot be forced to sell the home and move. Terms include living in the house as your
primary residence, maintaining the home, and paying home expenses such as taxes and insurance. Some circumstances will cause the
loan to mature and the balance to become due and payable. Credit is subject to age, property and some limited debt qualifications.
Program rates, fees, terms, and conditions are not available in all states and subject to change
#2 MYTH: Your home will be taken away when you pass away, and the family loses the right to the property.
FACT: When you permanently move out of the home, whether you sell it or pass away, neither you, your estate nor your heirs are
responsible for paying the deficit if the balance owed on your reverse mortgage exceeds the home value. However, should your heirs
want to keep your home, they may purchase it for 95% of the current appraised value. *
#3 MYTH: Your house must be debt-free to qualify for a reverse mortgage.
FACT: The amount of money you qualify for a reverse mortgage varies based on the down payment you will need to bring to closing
(ranges from 30 – 74%), which will be determined based on your age, or age of non-borrowing spouse, if applicable, current interest
rates and the sales price (or appraised value, whichever is less) of the home you are buying. You must live in the house as your primary
residence (live there 6+ months per year). Some income, property, and credit qualifications apply to ensure you can pay taxes and
insurance and maintain the home.
#4 MYTH: The safest thing is a house “free and clear.”
FACT: In the event of an extended nursing home stay or a lawsuit, all your home equity can be lost that you spent your whole life to
create. A reverse mortgage loan can unlock that equity and allow you to manage it for the benefit of your family properly. Talk to your
financial advisor about how a reverse mortgage can help you do this, including helping you pay for longer-term expenses such as
medical and nursing home expenses.

Learn more by contacting Bill Cave directly at 623-341-6334 are at Bill.Cave@FairwayMC.com

www.FairwayReverseAZ.com

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Real Estate NOW Pros!By Gena SchaublinApr 17, 2020