When it comes to reverse mortgages, there’s a lot of confusion out there. Many seniors worry that taking out a reverse mortgage might cause them to lose their home or leave nothing behind for their loved ones. Let’s clear up the confusion by busting some common myths about reverse mortgages.
Myth #1: You Lose Ownership of Your Home
Truth: You remain the owner of your home.
A reverse mortgage doesn’t mean handing over the keys to the bank. You stay in your home and maintain ownership for as long as you continue to live there. You’ll still need to keep up with property taxes, homeowners insurance, and maintenance, but the house is yours—just like with a regular mortgage.
Myth #2: Your Home Must Be Paid Off in Full
Truth: You don’t have to own your home outright to qualify.
While having more equity in your home helps, you can still get a reverse mortgage if you owe some money on your current mortgage. The funds from the reverse mortgage would first pay off the remaining balance of your traditional mortgage, and then you can use the rest however you like.
Myth #3: You Could Owe More Than Your Home is Worth
Truth: Reverse mortgages are designed to protect you from owing more than the value of your home.
One of the best features of a reverse mortgage is that it’s a “non-recourse” loan. This means that if the loan balance exceeds the value of your home when it’s sold, neither you nor your heirs will have to pay the difference. Your home’s value will always cover the loan.
Myth #4: Your Heirs Will Be Stuck With Debt
Truth: Your heirs will not be left with a debt to repay.
When you pass away, your heirs can choose to either sell the house to pay off the reverse mortgage or keep the home by paying off the loan balance. If the house sells for more than what’s owed on the reverse mortgage, your heirs keep the extra money. If the home sells for less than what’s owed, the reverse mortgage insurance covers the difference.
Myth #5: A Reverse Mortgage is Only a Last Resort
Truth: A reverse mortgage can be a strategic tool, not just a last-ditch option.
Many seniors use reverse mortgages to improve their quality of life. Whether it’s paying off medical bills, covering day-to-day expenses, or even making home improvements, the extra cash can make retirement much more comfortable. It’s not just for those in financial trouble—it’s a tool to help you enjoy your retirement years.
How to Know if a Reverse Mortgage is Right for You
A reverse mortgage can be a great solution if you’re looking to supplement your income and stay in your home. It’s important to consider your long-term plans and speak with a professional who can help you understand if this option aligns with your retirement goals.
Ready to achieve your homeownership or retirement goals?
Whether you’re a first-time buyer, a veteran, or exploring reverse mortgage options, I’m here to guide you! I'm here to make the mortgage process easy and transparent—let’s turn your financial dreams into reality. Reach out to me, Matt Helton (NMLS #178551), at (888) 488-3807 to get started. And for more insights, tune into the Serving Seniors Podcast at https://www.servingseniorspodcast.com/!
