Who Owns My Home If I Get a Reverse Mortgage?

by Francine Huff
July 21st, 2009

One of the myths about reverse mortgages is that if you get one the bank will own your home. That is false. Having a reverse mortgage doesn’t mean you’ll give up title to your home, so if anyone tries to convince you otherwise there may be a scam in the works.

Reverse Mortgage Facts
A reverse mortgage simply allows you to convert some of the home equity you’ve built up over the years into cash. With a reverse mortgage loan you won’t have any monthly payments and will never owe a lender more than the appraised market value of your home. Getting a reverse mortgage isn’t cheap, so be prepared to pay a variety of fees to get one. Those costs include origination fee, mortgage insurance premium, appraisal fee, and other closing costs.

You may qualify for a reverse home loan if you are 62 or older, but remember, the older you are the more money you’ll qualify to receive. Only your primary residence will qualify, so don’t expect to take out a reverse mortgage loan for a vacation or investment property.

Paying Back a Reverse Mortgage
While you will retain the title to your home, there are a couple of situations where you could be forced to repay your reverse mortgage early. If you fall behind on your property taxes and homeowner’s insurance payments, the mortgage lender could require that your loan be paid back. You’ll also need to keep up repairs on the property.

Reverse Mortgage Scams
Watch out for con men looking to strip you of home equity or the title to your home. According to the Federal Bureau of Investigation (FBI), reverse mortgage scams are proliferating. Some of these scams involve people who approach seniors who are struggling financially. The fraudsters promise to help homeowners save their homes and convince them to sign over the titles to get reverse mortgages.

Be on guard against strangers who contact you out of the blue to help save your home. If you really want to investigate reverse mortgage loans, you can find a reputable lender here.

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