Major Reverse Mortgage Myths
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The chances are pretty good that you’ve heard the expression if something sounds too good to be true, it probably is. People who come up with objections to reverse mortgages seem to have this saying in mind because most of their objections stem from untrue assumptions that make them think that reverse mortgages are “something for nothing” and, therefore, are too good to be true.

It is not true that reverse mortgages are “something for nothing,” but it is true that they are exceptionally beneficial loans that allow both the lender and the borrower to get what they want in the end. Most of the negative things you are likely to hear about reverse mortgages are simply false, and to illustrate that point, here are some major reverse mortgage myths cleared up.

Myth #1 – Reverse mortgages can make you lose your home

This is the most common myth currently out there about reverse mortgages, and it could not be more false! People say this because they are thinking about the concept of collateral. Collateral is something that applies to mortgages and home equity loans, but it does not apply to reverse mortgages in the conventional sense because reverse mortgages do not have monthly payments. The money that is loaned to you in a reverse mortgage is recouped when you pass away or sell your home; a reverse mortgage lender will never force you to sell your home while you are still living in it in order to get their money back.

Myth #2 – Reverse mortgage debts have to be paid by your children

This is another myth that is commonly told about reverse mortgages, and once again, it is very much untrue. As mentioned above, the money is lent to you because of the large equity that you have in your house. The debt is never called in until you either pass away or sell your house and because you are using the money from your home to pay back the debt after your need for the home is gone, there is no way that the debt would be passed on and forced to be paid by your children.

Myth #3 – Reverse mortgage income will cause your social security to go down

Again, this is another myth. Social security benefits are based on the contributions you’ve made over your lifetime into the social security fund and therefore there is no way they can possibly go down based on the reverse mortgage should you choose to take it out. Even if you currently happen to be on an income tested benefit, the reverse mortgage is a loan. It is not income and therefore can not affect your benefit in any negative way.

Myth #4 – There is no government oversight on companies that give out reverse mortgages

This is perhaps the most blatantly false myth currently out there. The fact of the matter is that the federal government actually provides their own counselors in order to protect people like you that might be considering a reverse mortgage.

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