With the recent wave of Wisconsin Reverse Mortgages happening there is a lot of misinformation out there. I have heard of some really bad reasons not to take out a reverse mortgage and decided it was time to write about some of them. Please remember reverse mortgages aren't for everyone but make sure the reason you aren't investigating them is not on this list. If you haven't even looked at a Wisconsin reverse mortgage for any of these reasons please take another look, it might work for you.

1. When taking out a reverse mortgage I no longer own the house my bank does. This is untrue because you are kept on the title as owner of the property. As a matter of fact the bank can't foreclose on you like a forward mortgage. You live in the house as long as you can and will always own the property till you decide to sell. like a regular mortgage the bank will place a lien on the house to insure it get paid off but you maintain complete control of the house.

2. My children won't get anything when I pass. Your estate only owes as much a the mortgage balance is at the time of payoff. The payoff is however much you have spent plus interest. Any equity that is left over is passed on to your heirs. the bank does not get too keep any of this extra equity. As an easy example if you owe 25,000 on the reverse mortgage and the house os worth 125,000 and it was sold. You would get the extra 100,000 not the bank or anyone else. The lender would get paid there 25,000 they have given you.

3. I could get forced out of my home by my bank. FHA/HUD reverse mortgages specifically state that you can not be forced out of your home.

4. Social Security and Medicare will be affected by the money I receive from the reverse mortgage. This money is actually considered a loan and not income. For this reason a reverse mortgage does not lower Social Security or Medicare benefits like some want you to think.

5. I must have really good credit and income to qualify for a reverse mortgage. Actually it is a lot easier to qualify for a reverse mortgage than a forward mortgage that you have had in the past. Since there are no payments you don't need income to qualify. As for credit the only thing that is looked at is if you are currently going through a bankruptcy you may not qualify. If you have bad credit you will still qualify for a reverse mortgage.

6. My home must be free and clear with no mortgages to be able to get a reverse mortgage. No, you can have a mortgage and still qualify for a reverse mortgage. You will pay off the current mortgage with your new reverse mortgage and will be getting rid of the previous mortgage payment. You must have enough equity to pay the mortgage off completely and you will have to use some of your available cash to do so.

7. There are large out-of-pocket expenses which make it hard for seniors to get the loan. All of the costs, whether closing costs or interest, are financed. That means there are few out-of-pocket expenses at any point in the reverse mortgage.

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