Thanks to Morningstar and Longbridge Financial, highlights nine legacy perceptions that continue to influence how retirees think about reverse mortgages.

Reverse mortgages and other senior home equity solutions have evolved significantly over the years. However, many people, including older homeowners and their heirs, still hold outdated beliefs rooted in myths and misconceptions about these products.

In recognition of National Reverse Mortgage Day (February 11), industry insiders weigh in on the legacy perceptions, rather than current program rules and consumer protections, that often shape how older homeowners evaluate whether home equity solutions can play a role in retirement planning.

“Many of the concerns retirees express today reflect how reverse mortgages were viewed in the past, not how they function now,” said Melissa Macerato, Chief Revenue & Marketing Officer of Longbridge Financial. “That disconnect can prevent people from asking questions or fully understanding their options.”

Nine Legacy Perceptions That Continue to Shape Views of Reverse Mortgages

Industry experts, including those at Longbridge Financial, say the following long-standing assumptions remain among the most common:

Legacy Perception 1: Homeowners lose ownership of their home.

Reality: Homeowners who obtain a reverse mortgage retain the title to their home. As with any mortgage, borrowers remain responsible for meeting loan obligations, such as keeping current on property taxes, homeowners’ insurance, and property maintenance. The lender places a lien on the home, as with a traditional forward mortgage, which allows the loan to be repaid when it becomes due.

Legacy Perception 2: The lender takes the home when the borrower dies.

Reality: Heirs can inherit the home, just as they would with any other mortgage. When a reverse mortgage becomes due and payable, heirs may choose to repay the loan or sell the home. Because reverse mortgages are non-recourse loans, they will never owe more than the home is worth at the time of sale.

Legacy Perception 3: Reverse mortgages are only used as a last resort.

Reality: Manyhomeowners consider reverse mortgages to be a powerful financial tool when evaluating how to manage retirement expenses, including supplementing income or covering health care costs. At the same time, many financial professionals believe incorporating a reverse mortgage earlier rather than later can be a powerful addition to a comprehensive retirement plan.

Legacy Perception 4: Children inherit the debt.

Reality: Heirs do not inherit a reverse mortgage debt personally. When the loan becomes due, repayment is typically handled through the home itself. If the home is sold, the proceeds are used to repay the loan, and because reverse mortgages are non-recourse, the amount owed can never exceed the home’s value at the time of sale. Any remaining equity after the loan is repaid belongs to the heirs.

Legacy Perception 5: Reverse mortgages lack consumer protections.

Reality: The most common reverse mortgage today is the federally insured Home Equity Conversion Mortgage (HECM). HECMs include consumer protections such as mandatory counseling, required financial assessments, limits on initial withdrawals, and ongoing borrower safeguards. Other reverse mortgage options also typically include many similar consumer protections.

Legacy Perception 6: Heirs automatically lose their options if a reverse mortgage borrower dies.

Reality: When a reverse mortgage becomes due and payable following the death of the borrower and any qualified non-borrowing spouse, heirs are typically given a period of time to notify the loan servicer of their intentions. If required notices are not made within the allowable timeframe, and the property is occupied, the loan may proceed through foreclosure under existing rules.

Legacy Perception 7: Reverse mortgages are expensive.

Reality: Reverse mortgages don’t require large out-of-pocket expenses. Mortgage loan origination costs and reverse mortgage interest rates are in most cases, comparable to those of traditional mortgages. There are Federal Housing Administration (FHA) insurance costs that some traditional mortgages do not require, but they are relatively small. Typically, lender closing costs and fees can be financed into the loan, so in many cases, there’s little required out of pocket.

Legacy Perception 8: Reverse mortgages affect Social Security and Medicare eligibility.

Reality: Those benefits are generally unaffected by a reverse mortgage. Government entitlement programs such as Social Security and Medicare are typically not affected by a reverse mortgage; however, need-based programs such as Medicaid may be, depending on how much is taken and how long funds are retained. Individuals should consult a financial advisor and appropriate government agencies for any effect a reverse mortgage may have on taxes or government benefits.

Legacy Perception 9: Borrowers can be forced out of their home for not paying a reverse mortgage.

Reality: Reverse mortgages were designed to help older homeowners access their home equity while remaining in their homes, provided they continue to meet the terms of the loan. Borrowers are not required to make monthly mortgage payments. However, borrowers must continue to meet ongoing obligations, including maintaining the home in good condition, keeping property insurance current, and paying property taxes. Failure to meet these requirements may cause the loan to become due and payable under program rules.

“Many of these legacy perceptions persist even as retirees live longer, face higher costs, and rely more heavily on housing wealth as a primary financial asset,” said Macerato. “National Reverse Mortgage Day is an opportunity to encourage education and awareness around modern senior home equity solutions. Reverse mortgages are not the right choice for everyone, but decisions should be based on how the product works today, not on outdated assumptions.”

Thanks to Morningstar and Longbridge Financial ( one of our lenders ) for a great article. Many seniors today are getting squeezed to the limit. Sothat called me to late have lost their home. The problem is most people ask their trusted financial advisor, banker, neighbor, or a fairly smart friend about a Reverse Mortgage, and they hear NO- Don’t do it, but they never ask why.

If they did, they would hear my husband died, and I lost my social security income; we were just making it. I’m sure I’ll miss house payments within a month. I’ve already tried my best by turning down the A/C, eating twice a day, combining trips, and stretching my medicine. They get told no, and they assume they are doomed. I had a man recently in a 1.1 million dollar home who told me the truth. He only has $50,000 remining in his retirement account at age 74. I recently had a man call me who was 90 days behind on house payments, but had been told not to do a Reverse Mortgage. He told me the lender told him they would work with him and not to worry. He called a month later and said they lied, “My home is in the paper to be sold on the courthouse steps in 3 days. He lived in a $400,000 home with a $94,000 balance. He lost his home and $300,000. I told him he should have realized they wouldn’t hold off forever, and I could have had a realtor sell it for $450,000 or faster. Then we could use a Reverse Mortgage for purchase to purchase a garden home in the same neighborhood. I was told a long time ago at church that if you ask how someone is and they say “fine”, chances are they are not fine at all. Scott Underwood (205) 908-2993 at Reverse Mortgage Alabama is your local, honest Reverse Mortgage expert to talk with you about options. If I think the Reverse Mortgage isn’t a good option, I’ll be the first to tell you. Website