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Reverse Mortgage Myths and Facts

Listed below are common myths about reverse mortgages, followed by the facts that provide clarity and help you make informed decisions.

FactMyth
✔ You retain home ownership as long as you meet loan guidelines.Myth: You Immediately Lose Home Ownership
✔ While equity may decrease over time, it doesn’t vanish entirely.Myth: No Home Equity Left for Children
✔ A reverse mortgage is non-recourse, meaning repayment comes from the home’s sale proceeds.Myth: Children Responsible for Loan Repayment
✔ Monthly payments aren’t obligatory with a reverse mortgage.Myth: Monthly Payments Required
✔ Paying off existing debt and having equity are essential, but owning outright isn’t required.Myth: First Mortgage Must be Paid Off
✔ Selling is possible; the reverse mortgage must be settled at closing.Myth: Can’t Sell Home with Reverse Mortgage

Please consult professionals for specific advice. Information provided may change.

Additional HECM Loan / Reverse Mortgage Loan Facts

Many retirees benefit from reverse mortgages.
Older homeowners can access home value with a reverse mortgage.
This specialized loan is for homeowners aged 62 and older.
•Only the borrower’s primary residence qualifies.
•FHA-insured reverse mortgages (HECMs) have FHA protection.
HUD counseling is necessary before incurring loan costs.
Reverse mortgage proceeds are usually tax-free, but consult a tax advisor.²
It’s a loan, repaid upon home sale, borrower’s death, or non-compliance.²
Reverse mortgage can impact needs-based programs like Medicaid.²
The loan is secured by the home and non-compliance can lead to foreclosure.
Program details vary by state and are subject to change.


Please consult professionals for specific advice. Information provided may change.

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