Reverse Mortgages

• Loss of Ownership: One common myth is that by getting a reverse mortgage, homeowners lose ownership of their homes. In reality, borrowers retain ownership, and the loan is repaid when the home is sold or the borrower passes away.
• Impact on Social Security and Medicare: Some believe that receiving a reverse mortgage can affect eligibility for Social Security or Medicare benefits. However, these government benefits are generally unaffected by reverse mortgage proceeds.
• Negative Equity Risk: Another myth is that borrowers or their heirs can end up owing more than the home’s value. Reverse mortgages are non-recourse loans, meaning the repayment is capped at the home’s value, and heirs are not responsible for any shortfall.
• Inability to Pass on the Home to Heirs: There’s a misconception that heirs won’t inherit the home if a reverse mortgage is involved. In fact, heirs have the option to repay the loan and keep the home, or the home can be sold to settle the debt.
• Rising Debt Quickly: Some think that the loan balance on a reverse mortgage grows rapidly. While it does accrue interest, the rate is usually lower than the home’s appreciation, and responsible use can mitigate the growth of the loan balance.

A Reverse Mortgage for Purchase, also known as a Home Equity Conversion Mortgage (HECM for Purchase), offers a smart way for adults aged 62 and older to buy a new home without the burden of traditional mortgage payments.

By using equity from the sale of a current home or other assets as a substantial down payment, the reverse mortgage covers the remaining cost- allowing you to secure the right home for your needs while preserving financial flexibility in retirement.

• Maximize Your Buying Power: If you have a substantial down payment, a reverse mortgage can help you afford a higher-value home without the burden of monthly mortgage payments. This allows you to buy a home that better suits your lifestyle and future needs while keeping more cash on hand.
• Maintain Financial Flexibility: Many retirees consider downsizing or “right-sizing” their home. Instead of tying up all your cash in a new property, a reverse mortgage lets you preserve your savings for future expenses, investments, or unexpected costs— all while enjoying a mortgage-free lifestyle.
• Enhance Retirement Security: With a reverse mortgage for purchase, you can free up assets for travel, healthcare, or simply greater financial peace of mind. Keep more of your wealth liquid while securing a comfortable home for your next chapter.