Myths and Facts

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Myth: You immediately sign over ownership to your home.

Fact: You retain title to your home as long as you meet the loan guidelines and requirements such as: maintaining the property, paying all property charges such as property taxes, homeowners insurance, flood insurance, and homeowners association dues (if applicable), and avoiding extended absences from the home longer than six months.¹ As with any other mortgage, a lien is placed on the property to secure future repayment of the loan. 

Myth: If you take out a reverse mortgage loan your children won't be left with any of the home equity.

Fact: While the amount of equity typically decreases over time with a reverse mortgage, it doesn't mean there will be no equity left when the last borrower dies. There are several factors that go into how much equity will be left, such as home appreciation, length of the loan, and optional monthly payments. There can still be equity left for your children. 

Myth: You are not allowed to sell your home if you have a reverse mortgage.

Fact: You can sell your home if you wish and - just like any other mortgage loan - you must pay off the reverse mortgage at closing. There are also no prepayment penalties if you choose to pay off your loan early or make loan payments. 

Myth: A reverse mortgage requires that you can't make monthly mortgage payments.

Fact:  You have the option to make any amount of a payment that you would like.

Myth: A reverse mortgage is a lifetime commitment.

Fact: It is a never lifetime commitment. If you might be looking into to downsizing in the future, you can sell your home at anytime without a penalty. If you want to pay it off in the future with a traditional loan or Home Equity loan, you can do that at anytime without being penalized. Its your home and you are the only one in control.