I find it to be surprising, given all of the good information which is available, that people continue to belief reverse loans are a terrible solution for cash flow and financial security. Many continue to believe, the "Bank" will own their property and when they die, it will go to them and not their estate.
This is completely incorrect. A reverse loan is like any other mortgage. The borrower continues to own their home, they are required to continue to pay property taxes, keep their home insured and well maintained. There are no mortgage payments and the money they receive from using their home's equity, is not taxed.
When they pass away, their home goes to their estate ( Just like now), and the estate as six months up to one year to satisfy repayment of the loan balance. Most adult children will sell the home and receive any remaining equity.
It is the most regulated mortgage in the lending industry, with many protections in place to protect the borrower.
It is unfortunate some older homeowners are so distrustful of what is a fantastic financial tool to remain comfortably and independent in their home.
