Myths of the Reverse Mortgage

General Kevin Ovelson 4 Apr

The reverse mortgage has come a long way. They have evolved from a needs-based product to a solution that many financial planners recommend as an important component of a comprehensive retirement plan.

Unfortunately, there are still many misconceptions regarding reverse mortgages. HomEquity Bank, as outlined some common misconceptions. Below, are the four most common myths separated with supporting facts.

Myth #1: The bank owns the home.

Fact: You always maintain title ownership and control of your home, and you have the freedom to decide when and if you’d like to move or sell.

Myth #2: You will owe more than your home is worth.

Fact: Clients can qualify for up to 55% of the appraised value of the home, 33% on average. Due to the lender’s conservative lending practices, you can be confident that there will be equity left in the home when the loan is repaid. In fact, over 99% of HomEquity Bank’s clients (for example) have equity remaining in the home when the loan is repaid.

Myth #3: A reverse mortgage is a solution of last resort.

Fact: Many financial professionals recommend a reverse mortgage because it’s a great way to provide financial flexibility. Since it’s tax-free money, it allows retirement savings to last longer.

Myth #4: You cannot get a reverse mortgage if you have an existing mortgage.

Fact: Many clients use a reverse mortgage to pay off their existing mortgage and other debts, freeing up cash flow for you to use as you wish. How great would it feel to be free of regular mortgage payments?

I’m a Certified CHIP Reverse Mortgage Specialist and can answer any questions you may have! Call me today to see if a reverse mortgage is right for you.

You’ve paid into your home, now let your home pay you back to enjoy the years ahead.

SOME THOUGHTS ON CREDIT

General Kevin Ovelson 23 Mar

Like it or not we are living in a world of tighter mortgage guidelines (B20) and stress tests. Having a strong credit score is more important than ever before. Your score directly affects which lenders will be willing to work with you and what products and pricing you will be able to apply for.

Obviously, there are several factors for example: employment history, income level and type of property to name but a few. If your score is low your options are greatly reduced before we even begin.

Many people believe that they have a credit score but have little idea of how or why it got there. I’ve heard these many times, “I’m sure my credit is perfect because I never use it.” or “I’ve never had the need for credit cards, so my score must great!” The reality is that to have a credit score you need to first have some forms of credit and then use them responsibly.

So, how can you make sure you have a great credit score? Here are some tips to get you started.

  • You need must have credit. It may be surprising – but your credit score goes up as more credit is available to you (to a point). We recommend to minimally try the 3 – two’s approach: 2 lines of credit with at least 2 years of history and a minimum limit of $2,000 per line.
  • You must also pay your bills when they are due. That goes for your internet, cell phone and even parking tickets as these will be reflected on your credit bureau.
  • It also helps to start as soon as possible. The longer you have a clean record of paying your credit cards, loans or other credit facilities, the better your credit becomes.
  • Finally, make sure to carry a low balance. One of the least known ways to hurt your credit is to have high utilization, rule of thumb, keep the balances below 50% of the limit.

Can I help you with your credit? If you ever have any questions of concerns about this, do not ever hesitate to contact a mortgage professional (preferably me 😊) about your mortgage related needs.