Reverse Mortgage Myth's

Truth: You never lose ownership.
With a modern reverse mortgage, title stays 100% in your name, just like any traditional mortgage.
You maintain full ownership and full control - including the right to sell, refinance, or pass the home to heirs.
You're simply responsible for taxes, insurance, and basic upkeep.

Truth: Reverse mortgages are non-recourse.
Your heirs never inherit debt.
The loan is repaid only from the home's value.
If the home is worth more than the balance?
Your heirs keep the remaining equity.
If it's worth less?
FHA insurance covers the difference - not your family.

Truth: Costs are often misunderstood.
Yes - like any mortgage, a reverse has standard closing costs (title, escrow, insurance, appraisal).
But:

• Most or all can be financed into the loan.
• Lender credits can offset costs.
• And there are no required monthly payments, often improving cash flow by thousands per year.

When compared to selling the home, refinancing at today's rates, or drawing down investments, many borrowers find the reverse mortgage to be the lowest-cost solution long-term.

Truth: You can never owe more than the home's value at sale.
Reverse mortgages are non-recourse.
Even if the market crashes or you live to 110, your heirs (and you) are protected.
Most homeowners continue building equity through appreciation, leaving value behind.

Truth: The lender never takes title.
You stay on title.
Your home is yours.
As long as you live in the home, pay taxes/insurance, and maintain it, no lender can take the home.

Truth: A reverse mortgage line of credit cannot be frozen.
Unlike traditional HELOCs - which were frozen or called due in 2008 - reverse lines of credit are protected and cannot be reduced or canceled as long as you meet loan obligations.
Better yet, your available credit grows over time, regardless of market conditions.

Truth: Reverse mortgages are completely flexible.
You can:

• Sell the home
• Pay off the loan
• Refinance into another reverse
• Refinance into a traditional mortgage

There are no prepayment penalties, and you maintain full control.

Truth: Reverse mortgage funds are loan proceeds, not income.
They do not affect Social Security or Medicare.
Only certain needs-based programs (like Medicaid) require planning around large withdrawals.

Truth: Proceeds are tax-free.
Reverse mortgage funds are considered equity advances under current IRS rules - not income.

Truth: There are no required monthly payments.
You can make voluntary payments if you wish, but the program does not require them.

Truth: You can stay in your home for life.
As long as the home is your primary residence and you meet basic obligations, the loan cannot be called due - no matter how long you live.

Truth: Many financially successful retirees use reverse mortgages strategically.
Reverse mortgages are widely used by:

• Long-term planners
• High-net-worth homeowners
• Those protecting investment portfolios
• Those managing tax exposure
• Homeowners eliminating required monthly payments

It's not a "last resort" - it's a financial tool.

Truth: Most borrowers retain significant equity.
Thanks to appreciation, many homeowners still pass down meaningful equity.
Heirs can:

• Keep the home by paying the balance, or
• Sell the home and inherit the remaining equity

Truth: Rates are competitive and vary by program.
Like any mortgage, costs must be weighed against benefits:

• No monthly payments
• Increased cash flow
• Portfolio protection
• Delayed withdrawals
• Tax advantages
• Guaranteed credit line growth

For many retirees, the net benefit outweighs the rate.

Truth: Today's programs are highly regulated and require mandatory counseling.
HUD-approved, third-party counseling is required before applying.
You receive:

• Full written disclosures
• Detailed explanations
• Independent verification
• A clear understanding of all terms

Reverse mortgages today are safer, clearer, and better regulated than ever before.