Why Get Reverse Mortgage|How Reverse Works|Bank Reverse Mortgage - YouTube

Hello my name is Charles Guinn and I'm a certified aging in place specialist

I'm going to answer questions most people have about reverse mortgages.

we all know from old actors on TV and internet ads that reverse mortgages have no monthly

loan payments.

they make it seem like it's free money.

so often the very first question is, "why would a bank make a loan with no payments?"

well here's the answer: there is NO reason a bank would make a loan with no payments!

And they don't.

the home equity conversion mortgage, or reverse mortgage, has a payment.

One payment at the end of the loan when the loan comes due.

That's when the bank gets its mone back with interest.

The bank sees a reverse mortgage the same way you see a savings account.

They put money into your hands, with your property as collateral.

The money due back, the loan balance, grows every month because of the interest charge.

When you die or move out of your home, that one payment is due.

The loan is paid off by you or your heirs.

And the bank gets their profit.

Of course, you have benefitted by the reverse mortgage because you have use of the money

for as long as you live in your home.

Since there were no monthly loan payments, you couldn't lose your home for not being

able to pay the mortgage.

As long as you pay the taxes and insurance on your home, the same as if there were no

loan on the property, you have a home for the rest of your life!

2 more added benefits to the bank.

1) the loan is insured by FHA.

If the home loses value during the term of the loan, the FHA will pay the difference.

THe insurance is also good for you.

Even if the bank goes out of business, you will get all the money you should get from

your reverse mortgage.

The final benefit to the bank is that the loan can be considered an asset to the bank

and the asset gets a little bigger each month.

Most people have a lot of questions: -What are the 3 ways you can get hurt by a

reverse mortgage?

-Are reverse mortgages more expensive?

-What are the new financial and credit qualifications?

-Does the bank own my home when I have a reverse mortgage?

-what happens to my home when I pass it to my heirs?

-Can I move when I have a reverse mortgage?

-Use a reverse mortgage to build cash -Using a reverse mortgage to increase distrubtions

-Using a reverse mortgage as a business line of credit

The home equity conversion mortgage was designed to help with certain financial needs and goals.

Correctly applied, it can help you have a place to live for the rest of your life.

But if used the wrong way, it can be devastating.