The 13 biggest reverse mortgage myths
What people believe vs. what's actually true

The reverse mortgage has a reputation problem — and some of it was earned. Early versions of the product had fewer protections. But the HECM program has been overhauled since then, and many of the things people believe just aren't true anymore. Here are the 13 myths I hear most often.

"The bank will own my home"

Not true. You keep the title and full ownership of your home. A reverse mortgage is a lien — the same thing as a regular mortgage. Your name stays on the deed. You can sell, renovate, or leave the home to your heirs anytime.

"I can owe more than my home is worth"

Not true. The HECM is a non-recourse loan. You and your heirs can never owe more than the home's value. If the balance grows past what the home is worth, FHA insurance covers the difference.

"My children will be stuck with the debt"

Not true. Your heirs are never personally on the hook. They can sell the home and keep the equity, refinance to keep it, or walk away owing nothing.

"It's only for people who are desperate"

Not true. Financial planners are increasingly recommending HECMs as a smart retirement tool. The growing line of credit works as a financial safety net. Many borrowers use it not because they're struggling, but because it's a good strategy.

"I won't qualify because of my credit"

Not true. There's no minimum credit score. The financial assessment looks at your history of paying property taxes and insurance — not a credit score number.

"It costs too much"

It depends on how you look at it. Upfront costs are higher than a HELOC. But a HECM requires no monthly payments and can't be taken away. Over a 10–20 year stay, the yearly cost is pretty reasonable. And selling your home costs 5–6% in commissions — often more than HECM closing costs.

"I'll have to make payments once the money runs out"

Not true. You never make mortgage payments on a HECM. Period. It doesn't matter how much you've taken out or if your line of credit is empty. Your only obligations are property taxes, insurance, and home maintenance.

"I can't sell my home"

Not true. You can sell anytime you want. The reverse mortgage gets paid off from the sale proceeds, just like any other mortgage. There are no prepayment penalties.

"The proceeds are taxable"

Not true. Reverse mortgage money is a loan advance, not income. It's generally not subject to federal or state income tax. That makes it one of the most tax-friendly ways to tap home equity in retirement.

"I could be forced out if I live too long"

Not true. A HECM has no maturity date tied to your age or how much you've borrowed. As long as you live in the home and keep up taxes, insurance, and maintenance, you cannot be forced out — no matter how long you live or how large the balance grows.

"I have to own my home free and clear"

Not true. You can have an existing mortgage — the HECM pays it off at closing. Eliminating that monthly payment is one of the most common reasons people get one in the first place.

"It will cancel my Social Security or Medicare"

Not true. Reverse mortgage proceeds don't affect Social Security or Medicare at all. Need-based programs like Medicaid have separate asset rules worth understanding — but your earned benefits are never touched.

"Those TV commercials tell the whole story"

Not even close. Celebrity-endorsed ads are marketing, not education. They oversimplify the product and often set the wrong expectations. Real education comes from HUD counseling, your own research, and a licensed specialist who will show you the real numbers — including the costs.

Facts beat fear every time

Most of what people "know" about reverse mortgages is outdated or just wrong. Today's HECM program has strong federal protections, mandatory counseling, and rules built to keep borrowers safe.

The best defense against myths is education — and you're already doing that by reading this. If you want to talk through any of these points, schedule a conversation.