Wisconsin Reverse Mortgage E Book

With the recent wave of Wisconsin Reverse Mortgages happening there is a lot of misinformation out there. I have heard of some really bad reasons not to take out a reverse mortgage and decided it was time to write about some of them. Please remember reverse mortgages aren't for everyone but make sure the reason you aren't investigating them is not on this list. If you haven't even looked at a Wisconsin reverse mortgage for any of these reasons please take another look, it might work for you.

1. When taking out a reverse mortgage I no longer own the house my bank does. This is untrue because you are kept on the title as owner of the property. As a matter of fact the bank can't foreclose on you like a forward mortgage. You live in the house as long as you can and will always own the property till you decide to sell. like a regular mortgage the bank will place a lien on the house to insure it get paid off but you maintain complete control of the house.

2. My children won't get anything when I pass. Your estate only owes as much a the mortgage balance is at the time of payoff. The payoff is however much you have spent plus interest. Any equity that is left over is passed on to your heirs. the bank does not get too keep any of this extra equity. As an easy example if you owe 25,000 on the reverse mortgage and the house os worth 125,000 and it was sold. You would get the extra 100,000 not the bank or anyone else. The lender would get paid there 25,000 they have given you.

3. I could get forced out of my home by my bank. FHA/HUD reverse mortgages specifically state that you can not be forced out of your home.

4. Social Security and Medicare will be affected by the money I receive from the reverse mortgage. This money is actually considered a loan and not income. For this reason a reverse mortgage does not lower Social Security or Medicare benefits like some want you to think.

5. I must have really good credit and income to qualify for a reverse mortgage. Actually it is a lot easier to qualify for a reverse mortgage than a forward mortgage that you have had in the past. Since there are no payments you don't need income to qualify. As for credit the only thing that is looked at is if you are currently going through a bankruptcy you may not qualify. If you have bad credit you will still qualify for a reverse mortgage.

6. My home must be free and clear with no mortgages to be able to get a reverse mortgage. No, you can have a mortgage and still qualify for a reverse mortgage. You will pay off the current mortgage with your new reverse mortgage and will be getting rid of the previous mortgage payment. You must have enough equity to pay the mortgage off completely and you will have to use some of your available cash to do so.

7. There are large out-of-pocket expenses which make it hard for seniors to get the loan. All of the costs, whether closing costs or interest, are financed. That means there are few out-of-pocket expenses at any point in the reverse mortgage.

8. Reverse mortgage interest rates are higher than a regular mortgage. This is just not the case. In most cases the reverse mortgage has a lower rate than the current conforming fixed rate. The HECM product's interest rate is set by the Federal government.

9. I might "outlive" the loan (don't we all wish for that?). FHA/HUD reverse mortgages are designed specifically so that you can't outlive the loan. When you get the reverse mortgage, the lender will charge you 2% to purchase mandatory FHA mortgage insurance. That insurance guarantees that even if you live to be 100, you can never owe more than the value of your home and you can never be forced to leave.

10. A reverse mortgage is like a home equity loan. First, home equity loans may have many requirements such as high income, low debt, and good credit that a reverse mortgage does not. Second, you can "outlive" a home equity loan and end up being foreclosed on by the bank. This can never happen with a reverse mortgage. Third, a reverse mortgage usually has significantly lower interest rates.

Those were ten of the biggest misconceptions out there about reverse mortgages. I am sure I missed some but the key is get with a good reverse mortgage expert and they will be able to answer your questions. There are many resources that will help educate, I suggest you do some reading!

Reverse Mortgages - A Brief Introduction
By Joseph Kenny

With larger numbers of older Americans reaching retirement age than ever before, along with many others who have already stopped working, the need for long-term health and medical care is gaining more relevance in society.  No matter if it is about finding a nursing home or providing some sort of home care, it is difficult to locate the funds you need for them.  Many senior citizens are unsure of where they will get the money they need to continue caring for themselves if health problems should arise.  This may be why reverse mortgage getting more attention in the media.

More and more, as you read the newspaper, turn on the television, or browse financial investment websites, the subject to reverse mortgages is cropping up.  Many seek to shed some light on this often murky topic by highlighting the different advantages and disadvantages that are associated with reverse mortgages.  Notably, two major organizations that are focused on the elderly, AARP and the National Council on Aging (NCOA), have endorsed reversed mortgages as a viable option to provide long-term care solutions for seniors-in certain circumstances.

In a recent report conducted by the NCOA stated that over 13 million people are eligible to use a reverse mortgage to fund their long-term expenses at home and help many retain their independence longer.  This option has some definite advantages and offers alternative financial resources from which to draw from so less money is taken from Medicare and Medicaid, both of which are under enormous financial pressure due to the sheer volume of retirees who rely on them.

Before going any further, it will be good to define what a reverse mortgage is exactly.  First, they are also known as home equity conversion mortgage. Reverse mortgages are actually supported federal agencies like FHA and HUD. Only people sixty-two and older are eligible to use a reverse mortgage program.  This loan is called a 'non-recourse loan', because it does not have to be paid back in the event that the recipient dies.  Put a different ways, the family is not liable for the repayment of the reverse mortgage.

The reverse mortgage, as the name implies, works in the exact opposite way that a normal mortgage does.  You do not have to repay a reverse mortgage.  Rather, it is the homeowner who gets a regular check.  In fact, there are no monthly payments.  Repayment is required when the homeowner leaves the home for a nursing facility or passes away.

The money received from a reverse mortgage is totally tax free and does no affect your current Medicare or SSI benefits so seniors do not have to worry about looking money from their monthly incomes.

If you are considering a reverse mortgage, it is in your best interest to determine if your circumstances call for such a loan measure.  Not everyone may choose to use a reverse mortgage to deal with their particular situations but it is still remains a viable option for many. Yet, for those who have some difficulty making ends meets each month or find they are in need of costlier care options, the reverse mortgage represents relief and assistance.

Many senior citizens are taking advantage of the financial benefits and using the extra money that a reverse mortgage provides to pay for in-home care options, prescription drugs, to pay off linger debts, and even improve their homes so they can function there in safety and comfort.

Joe Kenny writes for Only Stop, compare buy to let mortgages in the UK, visit them today for fixed rate mortgages or Glitec for more mortgages and information.

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