EMAIL FRIEND Setting the Record Straight Reverse Mortgage Misconceptions You May Have Read or Heard MISCONCEPTION #6 - WHEN THE LOAN COMES DUE YOU MAY OWE MORE THAN THE HOME IS WORTH There are several safeguards for reverse mortgages, including built-in insurance from the Federal Government, through FHA. With this federal insurance, the total amount of debt that will have to be repaid if the home is sold can never be greater than the value of the home at the time of sale. If the property declines in value and the reverse mortgage balance is higher than the property value, the FHA insurance will cover the difference. You and/or your heirs are protected, which is very reassuring in a declining market. Related Links: The lender or bank will take my home We will have nothing to leave our children? When the loan becomes due, the lender will sell my home. There are strict credit and income requirements You cannot have an existing mortgage on your home My Social Security and Medicare benefits will be affected There are restrictions on how the money is used We will have to make monthly payments We will have to pay taxes on the funds received The lender may require immediate repayment A reverse mortgage is similar to a home equity loan Reverse mortgages are predatory It's difficult to qualify for a reverse mortgage Reverse mortgages are prohibitively expensive A reverse mortgage is only for those in desperate need and/or as a last resort Reverse mortgages are not safe Other misrepresentations you may have heard For more information [ PRIVACY POLICY ]     [ TERMS OF USE ]