True or False Facts About Reverse Mortgage

1. If I get a reverse mortgage that means the bank holds title to my home.

FALSE. Title does not get transferred into the bank’s name. Throughout the life of the loan, you own your
own home.

2. Even though I have done my research on reverse mortgages and fully understand the product, I still have to obtain reverse mortgage counseling.

TRUE. All programs require independent, third-party counseling by an approved entity. Counseling can be done in person or by phone.

3. I am not allowed to hold title in my trust.

FALSE. The lending institutions will allow you to hold title in your trust as long as you meet all of the lender’s and/or HUD guidelines.

4. If I decide to sell my home, the bank will make me pay back the loan and will collect a portion of
the appreciation.

FALSE. The lender will only collect the amount that is due to them. If the loan balance is larger than the home value, the lender will only collect the proceeds from the sale. You can never owe more than what your home
is worth.

5. If I don’t want to pay my taxes and insurance, the lender can set aside a portion of the loan funds and pay them for me.

TRUE. If you would like to impound the taxes and insurance, depending upon the lender, they can arrange that for you.

6. I must have good credit to qualify for a
reverse mortgage.

FALSE. The lender will run a credit report for tax and federal liens. All recorded liens must be paid off and property taxes must be paid and be current at the time of closing so the lender can take first position.

7. My house must be in prime condition if I am to be considered for a reverse mortgage.

FALSE. The lender requires that the home meet certain guidelines. If you are considering a Home Equity Conversion Mortgage, it must meet HUD requirements. You may also qualify for a repair set-aside if work needs to be done on your home. Check with your lender for more information.

8. I am allowed to change my payment plan after the close of escrow.

TRUE. You may contact the servicing department and make arrangements to change your plan for a
small fee.

9. The only homeowners that get a reverse mortgage are seniors who can’t afford to make their monthly mortgage payments.

FALSE. We have found that seniors will use the money to go on vacation, buy a new car, remodel their home, pay for the grandchildren’s education, buy another home or just to feel financially secure in their golden years.

10. The older I am, the more money I can get from a reverse mortgage.

TRUE. A senior that is 80 years old may receive more money than a 62-year-old senior. The loan amount is based on age, home value and life expectancy.

Contact us for more information on reverse mortgages, title insurance and to find out why we’re the right title company for you.

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721 Route 34, Suite 3
Matawan, NJ 07747
Phone: 732-242-9835
Toll Free: 877-550-MEGA
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