Does The Bank Own My Home After I Do A Reverse Mortgage?
Wednesday, August 11th, 2010Is there any truth to the argument that the bank owns your home if you do a reverse mortgage?
The fact is, there is virtually nothing different about a reverse mortgage than any other mortgage when it comes to ownership. The bank uses your home for collateral the same way for either style loan. You still own the home, and you have all the rights associated with it. You can sell or refinance, without penalty, at any time you choose. If you desire to sell your home, the lender will need to be paid off, and any remaining equity is yours to spend how you wish.
Sometimes the confusion about who owns the home is because of a life estate. Investors will buy your home and let you live in it for the rest of your life rent free. They do this in hopes that when they have possession of the property, it can be developed profitably. This is not the same as a reverse mortgage, and these programs are not related.
Just to clarify another point before you have to ask, the State does not take your home either. As long as you maintain your property taxes, you will be in their good graces. By the way, if you live in Oregon, you can have your property taxes deferred. Don’t do it before you get your loan, or you will have to pay them off. But instead, do the reverse mortgage and after that is complete, you can defer your property taxes.
In summary, you own your home. There is never a time that a reverse mortgage requires you to give up the home. You have the right to sell your home, keep any remaining equity, and do with it as you please.
The same rule applies to your heirs upon your passing. They inherit the home along with the mortgage and existing equity. If they want to keep the home, they will be required to pay off the existing mortgage. If the decision is to sell the home, any remaining equity will be theirs.
Before you commit to any reverse mortgage programs, make sure you have all the facts. Visit our website for more reverse mortgage information. Use our reverse mortgage calculator to get an idea of how much money is available to you.