Senior Citizen's Guide to Pittsburgh 2017 Summer/Fall Edition - page 33

Boomers Resource Guide
• Summer / Fall 2017
31
A reverse mortgage is a unique
product that needs to be studied—
and those who misinform often do
not take the time to properly study
or research it.
The most commonly heard
misinformation is:
Reverse mortgages
are some kind of scam
A reverse mortgage is a well
thought out, very creative and
highly effective solution to a soci-
etal problem—the inability of some
seniors to have enough money to
get through their retirement years.
With people living longer than they
might have anticipated and with
many people’s savings diminished
by the economic downturn, being
able to use your home equity is
one of the sources of support and
comfort available.
Reverse mortgages
are too good to be true
Reverse mortgages are not a
fantasy. They are by no means a
trick. You worked hard to earn the
equity in your home and you de-
serve the chance to use that money
if and when you need it. There is a
cost attached to a reverse mortgage,
as with every loan. And there are
responsibilities that come with it.
Reverse mortgages
are the loan of last resort
In some people’s cases they
may be. For others they may not
be. You may choose to use a re-
verse mortgage to help you cover
your expenses while you wait for
your retirement savings account
to go back to their pre-recession
levels. You may use it to help you
through until home values recover
and you can sell your home for a
higher price. A reverse mortgage,
like social security, medicare/
Medicaid, IRs and 401-Ks, is an
option in a retirement toolbox—
and different situations require
different tools.
When you take a reverse mort-
gage, the bank owns your home
No, you continue to own your
home. And when you pass on, your
heirs own your home, though they
must then pay back the reverse
mortgage. If you are in arrears on
taxes and insurance, you are in de-
fault and, to keep your home, you
must work with the lender to catch
up on your obligations.
Salesman insist a senior use the
loan proceeds to purchase anoth-
er financial product as a condition
for obtaining a reverse mortgage
No, this is not legal.
Reverse Mortgages
Common Misperceptions
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