Buying a home on a mortgage is a common practice in our country. In a mortgage, the lender finances the home and the homeowner makes payments to pay off the debt and increase its equity in the home. When all the payments are made, usually it’s the time when the retirement of a homeowner is approaching. In order to access the equity that one has invested in, the house HECM reverse mortgage is used. Here we have highlighted some common myths about HECM reverse mortgage that people, due to lack of knowledge, regard as facts.
1. HECM Reverse Mortgages Are Very Expensive
It is true that reverse mortgages cost more than a traditional mortgage, but it won’t be true to say that an HECM reverse mortgage is extremely expensive. It generally costs only about 2% of the value of the home if its value is less than $200,000 but greater than $100,000.
2. Reverse Mortgage Is Only Designed for Widows
The first reverse mortgage product was designed to help a widow so that she could remain in her house for the rest of her life. But this does not mean that reverse mortgages are exclusively for widowed woman. Many aged men who want an additional fixed amount of cash flow also avail this option to spend their remaining life without tightening their belt.
3. You Do Not Have to Care About Your House Anymore As It Technically Belongs to the Lender
This surely is one common myth. Your house after signing the HECM reverse mortgage agreement technically and fundamentally belongs to you alone. However, you cannot stop caring about the house by neglecting the necessary maintenance. This is because your house is also the collateral of the lender and thus you will be required to keep the house in good condition so that the value of your home does not decline.
Longbridge Financial is an HECM reverse mortgage lender that is approved by the Federal Housing Administration (FHA). It operates in 46 states and is committed to providing financial peace of mind to the elder generation. It is a member of the NRMLA and is considered as the best reverse mortgage provider in New Jersey. Longbridge Financial is also one of the fastest growing HECM providers in the US. In 2016 alone, the annual growth of Longbridge was 277.4% and was ranked 22nd in the list of ‘Top 100 HECM Originators’.