As the mortgage industry continues to evolve, there are constant changes and expansions to products available. The days of vanilla 30 & 15 year fixed loans (though still excellent products) being your only options are long gone. One product that has begun gaining popularity is the “Reverse Mortgage”. While there are several variations of this product offered, they all basically provide the same thing: access to equity seniors have built up over the years of paying a traditional “forward” mortgage. It is a wonderful tool for people over the age of 62 who have a need for funds that would otherwise not be available to them.

However, it seems that whenever I hear the general public speak about reverse mortgages, they are cast in a negative light. Why is that? These are great products! One reason I believe is that there have been some common misconceptions about reverse mortgages put out there. Getting a reverse mortgage is just like having any other mortgage put on your home, it’s just a lien, only you don’t have to make payments on it! It doesn’t need to be paid back until you are no longer living in the house full time, and it doesn’t mean the bank owns your home either. You keep the title to your home, and should you decide to sell your home, you keep the difference between the sales price and the balance of the mortgage (just like any other mortgage). Also, you can never owe more than the home is worth so you can never leave your heirs with any financial debt from your home!

Although this product is not for everyone, it can be extremely beneficial for those seniors who are having trouble keeping up with their day to day expenses. It allows people to stay in their homes who might normally be faced with a tough decision. Think of it this way, if YOUR Mom and Dad, or Grandma and Grandpa were having trouble paying the bills, wouldn’t you want them to be able to use their home to stay in their home? The other option of course, they could always come move in with you…