Why Dave Ramsey is wrong about Reverse Mortgages
Financial Guru Dave Ramsey helps and influences millions of people. His following continues to grow via the many videos and resources online. Unfortunately, Dave’s opinions are not always right. In one particular instance I believe the powerful Dave Ramsey persona is causing unnecessary fear and harm to American Seniors.
I’m referencing Dave’s strong stance against the HECM Reverse Mortgage. Dave grossly misrepresents the HECM Reverse Mortgage and presents false opinions, explanations and information on how Reverse Mortgages Work.
Because of the good things Dave Ramsey has done too many of his followers are blindly accepting his opinions as fact and ignoring an opportunity that could dramatically improve their lives for the better.
False explanations from Dave Ramsey
These are some of the impressions Dave’s videos portray:
- Reverse Mortgages are Bad
- If you have a Reverse Mortgage there is a high probability that you’ll lose your home to the bank
- The impression that if you didn’t have a Reverse Mortgage you wouldn’t lose your home for not paying your property taxes
- Thousands of Seniors are being evicted from their homes seemingly at random
- Reverse Mortgage Interest rates are excessively higher than normal mortgage rates
Basic Reverse Mortgage Requirements to avoid foreclosure
If you have a Reverse Mortgage these are the primary terms to prevent you from going into foreclosure:
- A home with a Reverse Mortgage does require that Property Taxes, insurances, HOA,s and other property expenses be paid in a timely manner. This is the same for virtually all other mortgage types.
- Homes with a Reverse Mortgage must be used as a primary residence for the homeowner. The mortgage will be called due if the homeowner vacates the home permanently.
Why Dave Ramsey’s Reverse Mortgage comments are wrong
- If you own a home it doesn’t matter what mortgage you have or even if you don’t have a mortgage. You are required to pay property taxes or the county will foreclose on the home. If there is a Mortgage, the bank holding the mortgage will play a part of that foreclosure process to get their money back.
- The majority of Reverse Mortgage foreclosures are a result of the homeowner no longer living in the home. The owner likely has left the home voluntarily to live with family or go into a care facility for the remainder of their life. They likely do not have the ability to sell the home themselves and the kids do not want to get involved. The Banks initiate foreclosure because the homeowner has already left it and the terms of the mortgage agreement are no longer being met as the home is no longer the primary residence.
- There are no hidden loopholes that are allowing banks to take homes from homeowners. The laws are very strict in protecting seniors assuming they continue to meet the basic requirements listed above.
- For most of my clients the interest rate averages around 4.4% currently on a Reverse Mortgage. Conventional mortgage rates are closer to 4.75%.
Don’t be mislead by strong personalities in the media. Just because they speak with confidence and high energy doesn’t mean what they tell you is true. Do your own research. Talk with a qualified professional who actually works in this field and get accurate information so you can make a truly informed decision on how you can live better.
If the HECM Reverse Mortgage is right for you, it doesn’t matter what Dave Ramsey thinks, I can promise it will make your life immensely better and financially more free and peaceful.
If you or someone you love would like more information please call me today.
President – Reverse Mortgage Specialist
Heritage Reverse Mortgage
Heritage NMLS #1497455 Trevor’s NMLS #: 267962
1060 South Main Street Bldg. A Suite 101B
St George Utah 84770