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Reverse Mortgage Myths Click on the Question below to find out the answers to the most commonly asked questions about reverse mortgages Debunking the Myths and Misconceptions about Reverse Mortgages. A Reverse Mortgage is perhaps the most misunderstood mortgage product on the market today. Although more and more senior homeowners are becoming aware of Reverse Mortgages, and the many amazing opportunities they provide, many common misunderstandings still exist. Destroying Reverse Mortgages Myths

Myth: I can't get a Reverse Mortgage because I already have a mortgage on my home.
Myth: I can't get a Reverse Mortgage because my income and/or credit won't qualify me. I only have a small retirement income and my credit is not at its best.
Myth: I turn control of my house over to the bank/lender.
Myth: A Reverse Mortgage will use up all of the equity in my home and there will be nothing left for my heirs.
Myth: My home needs some work, no Reverse Mortgage lender will want to lend on my home.
Myth: If I get a Reverse Mortgage, I will just be adding one more monthly bill to pay on my limited budget.
Myth: Only the really financially desperate can benefit from the Reverse Mortgage.
Myth: Selling my house is better than doing a Reverse Mortgage.
Myth: I should shop around for the best interest rate on my Reverse Mortgage.
Myth: Reverse Mortgages are expensive.
Myth: A traditional mortgage loan with monthly payments costs less and is always better than a Reverse Mortgage.
Myth: We are not eligible for a Reverse Mortgage because my spouse is not 62 years old yet.
Myth: I am going to leave a huge debt for my children. I don't want to create a problem for them.
Myth: A Reverse Mortgage is not safe.
Myth: Reverse Mortgages are only for borrowers with limited income.
Myth: Reverse Mortgage lenders charge excessive referral fees and back end fees.
Myth: We need good income and credit to qualify.
Myth: "I can't get a Reverse Mortgage because I already have a mortgage on my home."
Reality: The Reverse Mortgage must be in first lien position, however as long as there is enough money available from the Reverse Mortgage to pay off the existing mortgage, the borrower can take advantage of this great program.
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Myth: "I can't get a Reverse Mortgage because my income and/or credit won't qualify me. I only have a small retirement income and my credit is not at its best."
Reality: As long as the homeowner is not currently in bankruptcy, then income and credit issues are not considered.
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Myth: "I turn control of my house over to the bank/lender."
Reality: The borrower remains on title and in control of their estate. You continue to own your home. Just as with any mortgage, you can sell your home or pay off your reverse mortgage at any time.
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Myth: "A Reverse Mortgage will use up all of the equity in my home and there will be nothing left for my heirs."
Reality: Because you still own your home, and because it will continue to appreciate in value, it is very difficult to use up all of your equity. In fact, in many cases, depending on how much money you use, the amount of equity you have may increase.
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Myth: "My home needs some work, no Reverse Mortgage lender will want to lend on my home."
Reality: In most cases, deferred maintenance can be paid for with the proceeds from the Reverse Mortgage. A Reverse Mortgage can actually be a terrific way to get some things done around the house but without increasing your monthly payments.
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Myth: "If I get a Reverse Mortgage, I will just be adding one more monthly bill to pay on my limited budget."
Reality: The homeowner is only responsible for paying taxes, insurance, and upkeep of the home. As long as you live in your house, you will never have to make a payment.
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Myth: "Only the really financially desperate can benefit from the Reverse Mortgage."
Reality: Even though some seniors may have a greater or lesser need than others for the cash or income, the Reverse Mortgage can still be an excellent financial or estate planning tool. ***Remember the proceeds can be used for any purpose.
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Myth: "Selling my house is better than doing a Reverse Mortgage."
Reality: If you sell your home, you lose one of the largest and most secure investments you probably have. You would lose 6-10% of your home's equity in sales costs alone. After selling, you would most likely have to pay rent or some other type of monthly pay
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Myth: "I should shop around for the best interest rate on my Reverse Mortgage."
Reality: The federal government determines the interest rate for HUD Reverse Mortgages. This means that no matter where you go for your Reverse Mortgage, the rate will be exactly the same. You want to work with a lender that is helpful, knowledgeable, profess
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Myth: "Reverse Mortgages are expensive."
Reality: Even though a Reverse Mortgage has up-front costs that are folded into the loan, there are NEVER any monthly payments. Compared to other traditional types of home loans that have monthly payments, a Reverse Mortgage is much more economical - especial
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Myth: "A traditional mortgage loan with monthly payments costs less and is always better than a Reverse Mortgage."
Reality: Even though a traditional loan with monthly payments might work well in some cases, in general a traditional loan will cost more. In fact, over a 10 year period, a traditional loan of $75,000 will cost you an average of $30,000 more than a Reverse Mo
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Myth: "We are not eligible for a Reverse Mortgage because my spouse is not 62 years old yet."
Reality: While it is true that both borrowers must be 62 years or older, if one spouse is not 62, there are still strategies that can be employed that will enable you to obtain a Reverse Mortgage. These strategies can be very safe and practical.
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Myth: "I am going to leave a huge debt for my children. I don't want to create a problem for them."
Reality: The Reverse Mortgage is a 'no recourse' loan. The heirs to your estate will never be responsible for a debt balance owing beyond the value of your home. All they have to do it sell it.
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Myth: "A Reverse Mortgage is not safe."
Reality: False. Since there are no payments to make, you cannot fall behind in your payments. FHA insurance guarantees that the monthly income is for life. Consumer protections include counseling by AARP or an FHA approved counseling agency. FHA also limits t
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Myth: "Reverse Mortgages are only for borrowers with limited income."
Reality: Reverse Mortgages are often used to provide additional income to homeowners with limited income, but are can also provide cash for a vacation, a visit to the grandchildren or that new boat and can also be an important part of an estate or financial p
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Myth: "Reverse Mortgage lenders charge excessive referral fees and back end fees."
Reality: FHA strictly limits Reverse Mortgage fees.
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Myth: "We need good income and credit to qualify."
Reality: There are no income or credit requirements or limitations. Any homeowner age 62 or over can qualify.
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Reverse Mortgage Myths

Myth: I can't get a Reverse Mortgage because I already have a mortgage on my home.

Myth: I can't get a Reverse Mortgage because my income and/or credit won't qualify me. I only have a small retirement income and my credit is not at its best.

Myth: I turn control of my house over to the bank/lender.

Myth: A Reverse Mortgage will use up all of the equity in my home and there will be nothing left for my heirs.

Myth: My home needs some work, no Reverse Mortgage lender will want to lend on my home.

Myth: If I get a Reverse Mortgage, I will just be adding one more monthly bill to pay on my limited budget.

Myth: Only the really financially desperate can benefit from the Reverse Mortgage.

Myth: Selling my house is better than doing a Reverse Mortgage.

Myth: I should shop around for the best interest rate on my Reverse Mortgage.

Myth: Reverse Mortgages are expensive.

Myth: A traditional mortgage loan with monthly payments costs less and is always better than a Reverse Mortgage.

Myth: We are not eligible for a Reverse Mortgage because my spouse is not 62 years old yet.

Myth: I am going to leave a huge debt for my children. I don't want to create a problem for them.

Myth: A Reverse Mortgage is not safe.

Myth: Reverse Mortgages are only for borrowers with limited income.

Myth: Reverse Mortgage lenders charge excessive referral fees and back end fees.

Myth: We need good income and credit to qualify.

Myth: "I can't get a Reverse Mortgage because I already have a mortgage on my home."

Myth: "I can't get a Reverse Mortgage because my income and/or credit won't qualify me. I only have a small retirement income and my credit is not at its best."

Myth: "I turn control of my house over to the bank/lender."

Myth: "A Reverse Mortgage will use up all of the equity in my home and there will be nothing left for my heirs."

Myth: "My home needs some work, no Reverse Mortgage lender will want to lend on my home."

Myth: "If I get a Reverse Mortgage, I will just be adding one more monthly bill to pay on my limited budget."

Myth: "Only the really financially desperate can benefit from the Reverse Mortgage."

Myth: "Selling my house is better than doing a Reverse Mortgage."

Myth: "I should shop around for the best interest rate on my Reverse Mortgage."

Myth: "Reverse Mortgages are expensive."

Myth: "A traditional mortgage loan with monthly payments costs less and is always better than a Reverse Mortgage."

Myth: "We are not eligible for a Reverse Mortgage because my spouse is not 62 years old yet."

Myth: "I am going to leave a huge debt for my children. I don't want to create a problem for them."

Myth: "A Reverse Mortgage is not safe."

Myth: "Reverse Mortgages are only for borrowers with limited income."

Myth: "Reverse Mortgage lenders charge excessive referral fees and back end fees."

Myth: "We need good income and credit to qualify."