How Much Do You Really Know About Reverse Mortgages?

The Top Reverse Mortgage Myths Explained 

How much do you think you know about Reverse Mortgages? Take the ReverseVision "Test Your Knowledge" quiz and find out.  

Test Your Reverse Mortgage Knowledge 

Many lenders have misconceptions and a general knowledge gap around Home Equity Conversion Mortgages (HECM) and private reverse mortgages.

The top myths around reverse mortgages that hold lenders back from offering HECM's are the following:

  1. Reverse Mortgages are risky
  2. Seniors don't take out mortgage loans
  3. There is not enough volume in the market to make a reverse mortgage worthwhile
  4. Borrowers and their heirs are on the hook if the loan balance exceeds the home value
  5. The bank owns the home 
  6. A home can't be purchased with a reverse mortgage 
  7. HECMs are only for poor or desperate people used as a last resort 

These common myths and the lack of education around the reverse mortgage product, create many missed opportunities. As the leading reverse mortgage lending software platform ReverseVision is committed to educating lenders about how this powerful lending program can be used to help older Americans achieve their financial goals in retirement.

Fill out the form below to retrieve your FREE "cheat sheet". This FREE guide will help you learn the facts about reverse mortgages to better educate and serve your senior borrowers. After you submit your information, please take a few minutes to watch (below) the 4 common ways you can serve your borrowers with HECM's that you might be overlooking.

There has never been a better time to add reverse mortgages to your portfolio of products! Remember, it's just another loan program, but with built-in flexibility for accessing equity and FHA insured. 

Fill Out This Form to Receive Your FREE Reverse Mortgage Myths Guide

Apply Reverse Mortgages To Real Life 

Meet the smiths

Replace Your forward mortgage with A HECM

How would the Smiths financial options change if they replace their traditional mortgage and HELOC with a HECM while continuing to make the same payment on the HECM?

1. Home value: $500,000
2. Payoff 1st Mortgage: $125,000
10 more years @ 4.125%
Payment = $1,273.00
3. HELOC balance - $55,000 used of $75,000
10 more years @7%
Payment = $638.60
4. Youngest borrower: 62
5. Monthly Total = $1,911.60

This example will show what happens if the Smiths make the exact same payment on a HECM as they would have been making on their traditional forward mortgage.

Scenario-Replace forward mortgage with HECM

Meet Jim and Kathy

Sequence of Returns 

They are secure in retirement and claim they do not “need” a reverse mortgage. However, an inconsistent market has them questioning do they have enough funds to last their life span.

1. Home Value: $800,000
2. Payoff: $250,000
3. Youngest Borrower Age: 65
4. Probability of portfolio surviving to age 95 without a HECM ($1500/mo draw): 0.8%
5. Probability of portfolio surviving to age 95 with a HECM ($1500/mo draw) : 100%


This example shows how a HECM can extend the longevity of their retirement portfolio by sourcing funds from a HECM Line of Credit (LOC) during times of market volatility. Their financial planner can validate this as an effective strategy for managing sequence of returns risk.

Scenario-Sequence of returns

Meet the Jones's

Refinance with a HECM LOC

The Jones's have some retirement savings, but they are unsure if their funds will last. They have friends who’ve leveraged equity for peace of mind and want to learn more.

1. Home Value: $400,000
2. Payoff: $100,000
3. Youngest Borrower Age: 75
4. Available Line of Credit today: $121,200
5. Available Line of Credit in 10 years: $175,450

This example shows how a HECM can improve their cash flow and supplement their savings. They will remove their monthly mortgage payment and receive a substantial line of credit that can be used whenever they need extra funds.

Scenario-Refinance with a HECM LOC

Meet Helen Johnson

HECM for purchase

Helen is a single woman and wants to move closer to her children and grandchildren. Unfortunately, she believes she cannot afford the nicer home she wants.

1. Profit from Sold Home: $400,000
2. New Home Purchase Price: $600,000
3. Minimum Down payment of New Home: $248,000
4. Borrower Age: 68
5. Monthly Mortgage Payment = $0

This example shows what happens if Helen chooses to use a HECM to purchase her new home, where she can remain payment free and enjoy a nicer home near her family.

Scenario-HECM for purchase