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records department and look up the legal owner of that property, you will see your friends’
name listed as the legal owner of that property NOT the bank!
So to recap what I have covered so far …
When you get a reverse mortgage you are taking out a loan against your house just as you did
when you originally purchased the home (or refinanced the mortgage), but you never have to
pay the loan back as long as you live in the home as your primary residence more than 6
months of the year and meet all loan obligations such as remaining current on your property
taxes and homeowner’s insurance and keeping the home properly maintained.
Sounds too good to be true, right?
I hear that all the time from my reverse mortgage clients.
There are many uses for a reverse mortgage:
1. You can take out a lump sum of cash to tap into the equity of your home without having
to sell or take out a traditional mortgage.
2. You can use a reverse mortgage to pay off your existing mortgage. You may or may not
receive additional cash at closing, but you will never have to make a monthly mortgage
payment again.
3. You can use a reverse mortgage to PURCHASE a home. Many people do not realize
that reverse mortgages are NOT just for refinancing your current home. For example,
I’ve had clients who are down‐sizing from a $500,000 home down to a $300,000 home.
They use a reverse mortgage to cover at least 50% of the cost of the new home and that
allows them to keep a large percentage of the sales proceeds from their previous home
in the bank as cash reserves. And they never have to make a mortgage payment on
their new home.
4. You can draw a monthly payment for life, as long as you live in the home as your
primary residence. This is the least popular use of a reverse mortgage but the one that
most people think of when they hear about reverse mortgages. Frankly, I have never
had a reverse mortgage client choose this option because it’s not a very good deal.
Any money you receive at closing from the proceeds of a reverse mortgage is TAX‐FREE.
That’s because it is not “income” it is borrowed money. Of course, with a reverse mortgage you
never have to pay it back (until you sell or move out of the home) as long as you comply with
the reverse mortgage loan terms (property taxes, insurance and home maintenance.)
Reverse Mortgage Truth Report ©Best Mortgage Inc. (425) 649‐6000 Page 8
