5 Common Reverse Mortgage Myths

Reverse mortgages are one of the most misunderstood financial products available to homeowners 62 and older. Here we separate fact from fiction.

Myth #1: If I take out a Reverse Mortgage Loan, the lender will own my home.

Fact: Like any other mortgage, the homeowner still retains title and ownership during the life of the loan.

Myth #2: My children will be responsible for paying off the loan.

Fact: When the house is sold, there will be no mortgage debt for the family and heirs to pay.

Myth #3: If I outlive my life expectancy, the lender will evict me.

Fact: There is no time limit on how long seniors can stay in their homes.

Myth #4: There are restrictions on how I can use the proceeds.

Fact: The cash proceeds from a reverse mortgage can be used for any purpose.

Myth #5: If the market crashes and my home loses its value, I (or my heirs) will owe the difference.

Fact: A Reverse Mortgage is considered a non-recourse loan, insured by the FHA. This means in the rare occurrence that a home is "under water", the bank will absorb the debt, not you or your heirs.