Reverse Mortgage Myths — and the Reality Behind Them

Reverse mortgages — formally known as Home Equity Conversion Mortgages (HECMs) — have been misunderstood for decades. For the right borrower, they can be a transformative retirement planning tool. Understanding the reality is the first step toward making an informed decision.

Myth 1: The Bank Takes Your Home

This is the most pervasive misconception. With a reverse mortgage, you retain full ownership of your home. The lender places a lien on the property, as with any mortgage, but you remain on title. The loan becomes due when you sell, move out permanently, or pass away — not before.

Myth 2: You Can Owe More Than Your Home Is Worth

HECMs are non-recourse loans. If the loan balance ever exceeds your home's value, neither you nor your heirs are responsible for the difference. The FHA insurance fund covers that shortfall — a meaningful consumer protection built into the program.

Who Are Reverse Mortgages Right For?

• Homeowners age 62 and older with substantial equity
• Those who plan to remain in their home long-term
• Retirees looking to supplement fixed income without selling assets
• Borrowers seeking to eliminate a required monthly mortgage payment
• Those who want to fund healthcare or improvements without depleting savings

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A reverse mortgage isn't a last resort — it's a planning tool. Used strategically, it can meaningfully extend the longevity of a retirement portfolio.

Jennifer Ko, Founder of Koast Capital