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Over our time helping seniors and their families we've heard a whole lot of misinformation in regards to Reverse Mortgages. Many times seniors(or their children) decide that they don't even want to investigate the Reverse Mortgage program due to something they heard from a friend, or a cousin's friend, or a cousin's friend's cousin(you get the picture). So without further ado, we're going to explain some common fables and what's really true about the Reverse Mortgage program.


1) The lender or government will own my home if I get a reverse mortgage.

UNTRUE. A reverse mortgage is a lien(or mortgage) on the deed. The homeowner still has full ownership of the home, can sell it, keep it and pass it on to the kids. When the house DOES get passed to the kids, they will have to settle up for what's owed by refinancing the home if they want to keep it, or selling it if they don't want the house. The kids will then be entitled to all of the equity beyond what's owed. 


2) Someone got a Reverse Mortgage and lost their home.

As long as the senior has to continues to pay property taxes, keeps the home as the primary residence, and keeps the home in decent shape(if the roof falls off get a new one) they CAN NOT LOSE THEIR HOME. Anyone who's ever done a Reverse Mortgage with us knows that this is one of the first things we mention. In fact, if a senior has a history of not paying taxes, we will hold a set-aside so that taxes and homeowners insurance are automatically paid through the Reverse Mortgage. 


3) If I get a Reverse Mortgage I'm going to owe more than the home is worth.

IMPOSSIBLE. A Reverse Mortgage is a non-recourse loan, which means that you and/or your heirs are not personally liable for the loan if it exceeds the value of the home.


4) The children will lose their inheritance.

An amortization table is presented to the client at application showing the projected amount of equity in the property each year. All remaining equity in the home after the Reverse Mortgage is satisfied goes to the heirs


5) Children are against their parents getting a Reverse Mortgage.

(Mostly) FALSE. Most children are not greedy. Today's generations place their parent's quality of life above their inheritance. Some of our best clients are the senior's children. Once they realize that a Reverse Mortgage is safe and secure and will improve their parents' lives the children are all for it.


6) The costs are too high.

FALSE. The FHA highly regulates Reverse Mortgage fees. The costs are similar to any other government endorsed mortgage, such as FHA and VA loans. 


7) If I die my wife(or husband) can lose the home.

The was actually partially true in the past, but only if the senior's spouse was under 62. Now, if one spouse is 62+ and the other is under 62, if the 62+ spouse dies, the under 62 spouse will still be able to reside in the property for the remainder of their life. 


These are common myths that we hear time and time again. These myths are also a reason why Reverse Mortgage counselors are required. Through education, we can ensure that a senior and their family knows the in's and out's of this program, and how it will work specifically for them.


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