By Amy E. Feldman
PHILADELPHIA (CBS) – Alright, what exactly do you need to know about a reverse mortgage?
A woman wrote to Televangelist Pat Robertson to ask him his thoughts on reverse mortgages. No word on whether she spoke to Suze Orman about spirituality but she seems to have gotten her TV experts confused.
In any event, many financial experts took issue with his financial advice. Here are the things you need to know about reverse mortgages:
With a traditional mortgage you borrow money up front and pay the loan down over time. Reverse Mortgages are the opposite – they let a borrower who’s at least 62 years old convert the equity in their home into a lump sum or monthly payments that pays the homeowner so you accumulate the loan over time and pay it all back when you are no longer living in the house.
While you don’t have to make mortgage payments, you do still have to pay property taxes and home insurance fees and you are still required to maintain the property and you can lose your home if you don’t.
The amount of the loan is based on the age of the youngest homeowners, so people had been advised in the past to get the deed to name only the older spouse, who was then the only one taking out the loan. But that meant that when the older spouse died, the younger one found he or she had to pay back the loan or face eviction.
New rules were just enacted to help protect the non-borrowing spouse but there are still a lot of pitfalls, so talk to a financial advisor without a stake in your finances about reverse mortgages before signing on the dotted line.
Then you can pray with whomever you choose.