Myth
With a Reverse Mortgage, you are selling your house to the bank
Fact
You never give up ownership of your home and remain on title
Myth
Reverse Mortgages are expensive
Fact
Rates are comparable to conventional FHA rates with fees varying by lender
Myth
When loan balance is larger than value of the home, the borrower pays the difference
Fact
Reverse Mortgages are non-recourse loans, meaning the borrower or estate will never owe more than the current home value
Myth
You must own your home free and clear to qualify for a Reverse Mortgage
Fact
Many borrowers use loan proceeds to pay off their existing mortgages
Myth
If I pass the lender takes the home and my heirs receive nothing
Fact
Heirs have many options including sell, buy, or refinance. Timeline and restrictions do apply but most importantly heirs have rights and protections.
Myth
Sellers/Builders can’t contribute towards buyer’s closing costs
Fact
Sellers/Builders as of 2024 can contribute toward buyer’s closing cost
Myth
Reverse Mortgages are for borrowers who have no other options
Fact
Reverse Mortgages can be used as a sophisticated financial tool by financial advisors, CPAs, divorce attorneys, etc. Reverse Mortgages can serve as an insurance policy for many expenses facing seniors.
