Dispelling Myths
Myth:
A Reverse Mortgage is a good way to lose my house.
Truth:
With a reverse Mortgage you must pay your property taxes, home owners insurance, home owners association dues, and general maintenance of the property. You must also reside in the house as your primary residence (183 days per year).
If you meet these terms you are free to live in your house until you are 150 years old. Also, failure to meet these qualifications will simply require that you sell the house. Nobody is looking to come take your home away.
Myth:
I can outlive the terms of the loan
Truth:
As long as the home is your primary residence, your taxes, insurance, and HOA dues are paid the note is due and payable on your 150th birthday..
Most Important
The most important things to remember about a reverse mortgage once you have it....
The future value of the home does not affect the terms of the loan. This means if the real estate market drops, it doesn't change anything about your loan including the available line of credit if you have one.
You must live in the home 183 days per year as your primary residence.
You must pay your property taxes, home owner's insurance, and applicable HOA Dues. If you do all of this the home is yours to live in as long as you are able.
Why do I want a Reverse Mortgage
With a reverse Mortgage I am free from payments. I do not have any principle and interest mortgage payments to - EVER!
I may qualify for a revenue stream or line of credit. This money is available without payments, penalties, or taxes. Also it doesn't affect your current benefits such as social security or medicare.
I can diversity my assets without so much being tied up in my house.
A paid off house = free rent
A reverse mortgage is free rent + access to some home equiy