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Reverse Mortgage Questions: Myths, Facts and When It Isn't the Right Fit

Myths vs facts, when a reverse mortgage is not the right fit, and the alternatives worth comparing.

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Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307

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Does the bank own your home with a reverse mortgage?

This page is general information, not legal, tax or financial advice for your situation. Rules can change, so every fact below names its source and date.

No. The CFPB's reverse mortgage page (last reviewed August 28, 2026) says the title stays in your name. HUD's Programs of HUD 2025 says the borrower keeps ownership and may sell and move at any time, keeping any sale proceeds above the loan balance.

What the lender has is a lien, the same as with a regular mortgage. The difference is that you don't make monthly payments, and the balance grows instead of shrinking. Maggie wrote about this and other myths in Debunking Reverse Mortgage Myths.

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Will your kids inherit your reverse mortgage debt?

Not beyond the home. A HECM is non-recourse. Under 24 CFR 206.27(b)(8) (checked October 22, 2026), the borrower has no personal liability, and the lender can collect only through the sale of the home. If the balance grows past the home's value, the CFPB's heirs page (last reviewed August 28, 2026) says heirs can sell for at least 95% of the appraised value and the FHA insurance covers the rest.

What's true is that a reverse mortgage usually leaves less equity for heirs. If leaving the home free and clear matters to you, weigh that honestly. Our heirs and spouses page goes deeper.

Can you get a reverse mortgage if you still have a mortgage?

Yes, often. HUD's Programs of HUD 2025 says you must own the home outright or have substantial equity, and any existing liens must be paid off at settlement. Many borrowers use the reverse mortgage itself to pay off the old one, which ends the monthly payment.

The first-year limit was written with this in mind. HUD's Mortgagee Letter 2013-27 (September 3, 2013) allows the greater of 60% of the principal limit, or the required costs, including a mortgage payoff, plus 10%. The question is whether your equity is large enough. Our payout options page explains the first-year rules.

Isn't a reverse mortgage only for people who are desperate?

No, but it's not a rescue plan either. NCOA's guide (published July 9, 2026) says a reverse mortgage is not a quick solution for an immediate financial challenge. It's generally worth considering if you plan to stay in your home for several years and need extra cash.

Many people who use one are planning ahead. They might set up a line of credit as a standby fund, replace a monthly mortgage payment, or buy a single-story home with a HECM for Purchase. The required counseling and the financial assessment are there so the loan fits the person, whatever their reason.

Is a reverse mortgage a scam?

The loan isn't, but scams use it. NCOA (July 21, 2026) says reverse mortgages themselves are not a scam, though some people misuse them to take advantage of older homeowners. It also says federal law bars lenders from requiring you to buy another financial product, such as an annuity or long-term care insurance, to get one.

The CFPB (page last reviewed August 28, 2026) warns about contractors who push a reverse mortgage to pay for repairs. It also says the VA does not offer reverse mortgages, so ads suggesting VA approval may be false. And with most reverse mortgages you can cancel within three business days after closing. Do it in writing, ideally by certified mail with a return receipt.

Signs to slow down: pressure to sign quickly, someone else steering where the money goes, or a "free" seminar that ends in a sales pitch for investments.

When is a reverse mortgage not the right fit?

We would rather tell you no than sell you the wrong loan. A reverse mortgage may not fit if:

you expect to move within a few years, since upfront costs are spread over a short time,
you can't comfortably afford property taxes, insurance, HOA dues and upkeep,
the home needs more care than you can manage, and staying isn't realistic,
leaving the home free and clear to your heirs is your top priority,
a spouse or family member lives with you and wouldn't be protected after you're gone, or
you need a short-term fix for a money crisis.

NCOA's guide (July 9, 2026) puts it simply: because every situation is different, a reverse mortgage may not be the right choice for you.

What are the alternatives to a reverse mortgage?

A home equity line of credit (HELOC). You borrow against your equity but make monthly payments. See our home equity line page.
A refinance. A new regular loan may lower or reshape a payment. See our refinance page.
Selling and downsizing. Free up equity and move to a home that fits this stage of life. Start with Is it time to downsize?
Selling and moving to community living. Explore 55+ communities in the Sacramento region.
Staying and adapting. Our aging in place home check helps you see what staying would take.

Maggie's article Reverse Mortgage or Downsize: Which Fits a Fair Oaks Homeowner? compares two of these paths side by side.

How do Maggie's senior moves fit with a reverse mortgage?

Maggie is a mortgage broker and a real estate broker, with SRES and CAPS designations and Reverse Mortgage and Senior Financial Planning certification. That means one conversation can cover staying, selling, buying smaller or using a reverse mortgage, without anyone pushing just one answer.

If moving is the answer, Well MOVED is our senior move program. It puts the sale, the belongings, the move and the next home on one plan. We never take referral fees from senior placement services. If staying is the answer, we'll help you see what it takes and whether a HECM supports it.

How do you start sorting out whether a reverse mortgage fits?

Read our free reverse mortgage guide, then fill out the loan options form and choose "A reverse mortgage." You can also call Maggie's cell at (916) 549-3131. Adult children are welcome on the call if you'd like them there.

Before any HECM, you'll meet with an independent HUD-approved HECM counselor who doesn't work for us or the lender. You're always free to use any lender you like.

Frequently Asked Questions

Does the lender take my house with a reverse mortgage?

No. The title stays in your name, according to the CFPB. You can sell and move at any time. The loan comes due when you sell, move out or pass away, or if you don't meet the loan terms.

Do my children have to pay off my reverse mortgage?

Not personally. A HECM is non-recourse. Heirs can sell the home, pay off the loan to keep it, or, if it's worth less than the balance, sell for at least 95% of the appraised value.

Can I get a reverse mortgage if I still owe on my home?

Often, yes. Existing liens must be paid off at settlement, usually with the reverse mortgage itself. You need enough equity for that to work.

Can I cancel a reverse mortgage after closing?

With most reverse mortgages, yes, within three business days after closing, per the CFPB. Notify the lender in writing, ideally by certified mail with a return receipt.

Does the VA offer reverse mortgages?

No. The CFPB says the VA does not offer reverse mortgages, and ads suggesting VA approval may be false.

When should I not get a reverse mortgage?

If you expect to move soon, can't afford taxes, insurance and upkeep, want to leave the home free and clear, or need a quick fix for a money crisis. Compare a HELOC, a refinance or downsizing.

Is a reverse mortgage better than downsizing?

Neither is better for everyone. It depends on whether the home still fits your life, your costs and your plans for heirs. We can lay out both in dollars so you can decide.