PRINT PAGE EMAIL FRIEND ENLARGE TYPEFACE Setting the Record Straight Reverse Mortgage Misconceptions You May Have Read or Heard 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 When the loan comes due you may owe more than the home is worth 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 The Home Equity Conversion Mortgage (HECM) is the most common type of Reverse Mortgage and is the fastest growing segment of the mortgage marketplace. But as it has grown in popularity, so have the misconceptions, fabrications, and misleading "facts" associated with this valuable financial planning tool for homeowners age 62 or older. There are many sources of misinformation and "opinion as fact" about reverse mortgages, including national media, financial institutions, senior advocates, and even friends and family. "Don't touch your equity!" You'll hear this refrain from a few narrowly focused professional "consumer protection" advocates who mean well but don't have all of the right information. Unfortunately, a homeowner who heeds this advice runs the risk of having their home equity seized by Medicaid when circumstances require long term care, rather than using the equity in their home to sustain a dignified lifestyle for themselves and their spouses. The truth is that many financial professionals, attorneys, and advocacy associations do not really understand the HECM. It is sad, but true, that many people who could benefit from the HECM are dissuaded by good intentioned but often mistaken professionals. It is our goal to educate and inform, and to set the record straight about reverse mortgages by addressing some of the misconceptions about them. If you've heard great things about reverse mortgages, you have also heard some of these misrepresentations. Detailed and supportive information about reverse mortgages is readily available from the American Association of Retired Persons (AARP), the Federal Department of Housing and Urban Development (HUD), the National Council on Aging (NCOA), and the Federal Housing Administration (FHA). A reverse mortgage is a valuable and safe financial planning tool for people age 62 and older, and should certainly be given serious consideration when potential borrowers and their adult children are exploring all of the options available to fund retirement, increase cash flow, and provide cash for a multitude of quality-of-life needs and don't want to have to make a monthly payment. It fills the crucial need of providing cash from a borrower's home equity without saddling them with additional payments. [ PRIVACY POLICY ]     [ TERMS OF USE ]