Myths and Facts
Myths and Facts About Reverse Mortgages
Reverse mortgages are often misunderstood, leading many homeowners to believe incorrect information about how these loans work. Dale provides clear guidance to homeowners in Eugene, Springfield, Portland, Newport, and Brookings, helping separate fact from fiction and ensuring decisions are based on accurate knowledge.
One common myth is that a reverse mortgage means losing your home. In fact, homeowners retain ownership and remain responsible for property taxes, insurance, and maintenance. Dale educates clients in Oregon on these realities, helping them understand that homeownership remains intact throughout the life of the loan.
1. Myth: You lose ownership of your home.
Fact: Homeowners retain full ownership and title of their home with a reverse mortgage. You are responsible for property taxes, insurance, and maintenance, just as with any traditional mortgage.
2. Myth: Your heirs will inherit debt.
Fact: Reverse mortgages are non-recourse loans, meaning neither you nor your heirs will owe more than the home’s value at sale. Any remaining equity after repayment belongs to the heirs.
3. Myth: Reverse mortgages are only for struggling homeowners.
Fact: Reverse mortgages are a financial planning tool for homeowners with equity, often used to supplement retirement income, pay off debt, or fund home improvements.
4. Myth: The loan proceeds are taxable.
Fact: Funds received from a reverse mortgage are considered loan advances, not income, and are generally not subject to federal or state income taxes.
5. Myth: You cannot sell or move after getting a reverse mortgage.
Fact: Homeowners can sell or move at any time. The reverse mortgage is repaid when the home is sold, refinanced, or no longer used as the primary residence.
6. Myth: Reverse mortgages are risky and complicated.
Fact: While they are regulated loans, Dale ensures homeowners in Eugene, Springfield, Portland, Newport, and Brookings fully understand eligibility, repayment, interest, and obligations, making the process clear and manageable.
7. Myth: You must be in financial distress to qualify.
Fact: Eligibility is based primarily on age, home equity, and property value—not income. Many financially stable homeowners use reverse mortgages to enhance their retirement planning.
8. Myth: You can’t use the money freely.
Fact: Homeowners can use reverse mortgage proceeds for any purpose, including home improvements, medical expenses, travel, or supplementing retirement income, offering flexibility and control.
9. Myth: Only certain types of homes qualify.
Fact: Most single-family homes, approved condos, and certain manufactured homes in Eugene, Springfield, Portland, Newport, and Brookings qualify. Dale can review your property type to determine eligibility.
