Myth #1: “the bank will own my home”
Fact: Just like any mortgage or equity loan, you continue to own the home, with your name on the title. You must meet your current obligations: keeping current with taxes, homeowners insurance, and maintenance.
Myth #2: “I probably won’t qualify because I already have a mortgage”
Fact: a majority of people who get a reverse mortgage have a current mortgage and turning off current payments is one of the biggest advantages of having a reverse mortgage.
Myth #3: “I won’t be able to leave the home to my heirs”
Fact: Your heirs will still inherit the home. Just like a regular mortgage, they pay back the loan balance if they want to keep the home. They can also choose to sell the home and they will receive any remaining equity.
Myth #4: “Reverse mortgages are designed to take advantage of retirees”
Fact: Reverse mortgages are specifically designed to help retirees. The ability to access home equity can provide a greater sense of security and more financial flexibility. The industry is also highly regulated: any lender offering reverse mortgage must follow strict guidelines and regulations that are in place to protect borrowers.
Myth #5: “A reverse mortgage should only be used as a last resort”
Fact: Many savvy homeowners use reversed mortgage strategically. For example, as a safety net in case of emergencies. In recent years, there have been a number of product advances that have made reverse mortgages attractive, and academic researchers at respected universities have developed effective strategies for using a reverse mortgage as part of an overall retirement plan.