||May 10th, 2007|
Reverse Mortgages . . .
with Laura Strickler
Laura Strickler -
Your Reverse Mortgage Specialist
Living In Reverse
More than ever, reverse mortgages
are providing seniors an avenue to
financial independence. Reverse
mortgages are becoming more
popular than ever. The myths that
have been prevalent in the past are
slowly, but surely, being replaced
by facts and success stories of
seniors now enjoying their golden
My intention with this series of
columns is to educate the senior,
and their family members, about
reverse mortgages: to give you
facts about the program in language
that's understandable. I
want you to know what you're
talking about when the subject of
reverse mortgages comes up.
Most importantly, I want you to
have the correct information, so
that you can feel secure in whatever
decision you make.
Seniors often tell me that when
they mentioned looking into a
reverse mortgage to a friend, the
comeback went something like,"They're horrible! They'll take
your house! They're too expensive!
That's the worst thing I've
heard about!" Those comments
are based on one of the first versions
of reverse mortgages,
before the government got
involved. Those types of loans
are no longer around. Today's
reverse mortgage programs are
changing constantly, making
improvements that only benefit
Listed below are the most common
misconceptions and the reality
of today's reverse mortgages:
The Lender will take my home.
This is the most widely held misconception
about reverse mortgages.
You keep title to your
home. There is a lien against your
property, just like a regular mortgage.
You have to maintain your
property taxes and homeowner's
insurance, just like a regular mortgage.
You are required to live in
the property. Once you pass away,
your estate will sell the home, or
refinance it, and pay off your
reverse mortgage. But the lender
doesn't just take the home once
I won't have anything left for
Many of you want to
leave something to your children.
That wish is usually based on the
value of your largest asset, your
home. The goal of the reverse
mortgage lender is not to eat up all
of your equity. The loan amount
is much lower than your home
value today, to protect against that
very situation. Many adult children
prefer that their parents use
their home to help them stay independent,
to enjoy their retirement.
I have to have good credit to
Many of you are trying
to eke out a living on social security.
If you have a mortgage or
credit card debt, it's difficult, to
say the least. Your credit rating
may have suffered and you're
embarrassed. But don't let that
stop you from freeing yourself
from all of that financial stress.
Your credit report is obtained by
the lender, but your credit score
(FICO) does not enter into the
qualification process. The credit
report is pulled to check for debt
that must be paid, i.e. federal taxes.
I can't have an existing mortgage.
You don't have to own
your home free and clear. You can
use a reverse mortgage to pay off
an existing mortgage. Then you
can use whatever is left however
you wish. In some cases, the
reverse mortgage amount isn't
sufficient to pay off the existing
mortgage. I've had many clients
rid themselves of mortgage payments
by combining a reverse
mortgage and their own savings to
pay off an existing regular mortgage.
I'm not desperate enough.
Many seniors are using a reverse
mortgage as a financial planning
tool. You can establish a reverse
mortgage line of credit and have
access to an emergency fund. You
can use it to purchase long term
disability insurance. You can simply
want a little breathing room
each month. This is not a loan
just for the strapped senior. It's
whatever you want or need.
I hope this has helped you understand
what is and isn't true about
reverse mortgages. If you have
other questions, please call me.