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Confused by reverse mortgage loans? Welcome to the club.
Even mortgage experts concede that these loans are very complicated. “There is, in general, a lot of confusion about reverse mortgages,” says Stacy Canan, assistant director of the Consumer Financial Protection Bureau’s Office for Older Americans.
After several studies and focus groups, “what we learned is that many people didn’t understand reverse mortgage loans.”
Add to that that the rules governing these home loans change regularly, plus borrowers use their homes as collateral and usually take out just one reverse mortgage loan in their lifetimes. That adds up to a steep learning curve with not much margin for error.
So, it’s no wonder that reverse mortgage loans are subject to a lot of urban myths and misunderstandings. Here are five myths that persist, along with a few things you really need to know if you’re considering a reverse mortgage loan now or in the future.