Gabe Bodner, Reverse Mortgage specialist at The Rueth Team joins Nicole for this episode.
#1 myth: you give up the title of your house with Reverse Mortgage.
Bank or lender takes over the house.
You still own the house.
#2 myth: you can no longer pass the house to your heirs.
your heirs can inherit the home, pay off the reverse mortgage and inherit the additional equity above the reverse mortgage.
#3 myth: You're losing equity
FACT: Not losing but USING some of your equity.
Interest is added back to the loan through negative amortization. This does eat away at some of the equity, but based on interest rates on traditional loans, and growth and appreciation, you gain more equity than you are using and saving money on the loan if you need it.
#4 myth: You have to own your home free and clear
FACT: The existing mortgage balance can be absorbed or paid off.
This should be a loan of last resort.
You have a better probability of financial success by utilizing a reverse mortgage sooner because it's a more efficient use of the equity in retirement.
Can I use a reverse mortgage for purchase OR a refi?
If I pull money out for a reverse mortgage are you limited on what you can use it for?
The equity money can be used for anything you want, including acquiring more real estate, paying taxes, gifting, converting an IRA to a ROTH IRA.
The proceeds received are TAX-FREE because it's considered a loan.
Listen to Nicole's happy ending story of how one couple retired and bought two income properties wiping out their mortgage and bringing in steady income.
Some additional information you may find helpful.
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