Reverse Mortgage Myths:
10 Misconceptions Debunked

Top Reverse Mortgage Myths — Busted

Myth 1: "The bank owns your home"

FALSE. You retain full title and ownership. The lender only has a lien — just like any mortgage. You can sell the home anytime and keep the remaining equity.

Myth 2: "You can owe more than the home is worth"

FALSE for HECM loans. HECM reverse mortgages are non-recourse loans — the FHA insurance guarantees you or your heirs will never owe more than the home's value at repayment, even if the loan balance exceeds it.

Myth 3: "You need to be debt-free"

FALSE. You can have an existing mortgage — the reverse mortgage pays it off first. Any remaining proceeds are yours to use.

Myth 4: "Heirs lose the home"

FALSE. Heirs can keep the home by paying 95% of appraised value or the loan balance — whichever is less. They can also sell and keep remaining equity.

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