Misconceptions about reverse mortgages may cause homeowners to avoid consideration of these complex loans. Here are a few misconceptions about reverse mortgages.
Myth: The lender or bank takes the title to the home.
Truth: You still retain ownership of your home.
Myth: The loan can exceed the value of the property, sticking you or your heirs with a large bill when you eventually leave your home.
Truth: A reverse mortgage is a “non-recourse” loan, which means that you, your heirs, or your estate will never owe more than the appraised value of the home at loan maturity.
Myth: You can’t get a reverse mortgage if you currently have a conventional mortgage.
Truth: Although this is true, you can get a reverse mortgage if you use the proceeds to pay off your existing mortgage at a close.
Myth: A reverse mortgage can cause you to be evicted from your home.
Truth: You leave your home when you choose. No one will evict you from your home. The reverse mortgage is not due until your home is no longer your primary residence.