One of the most common concerns we hear about reverse mortgages is the fear of foreclosure. Many people believe that if they take out a reverse mortgage, “the bank” could take their home at any time. This misconception has been around for years, and it’s simply not true. The reality is that reverse mortgages carry the same requirements as any other FHA-backed mortgage, but one differentiator from other FHA mortgages is reverse mortgages offer seniors more protections.

The only circumstances that could lead to foreclosure with a reverse mortgage are if a homeowner fails to pay property taxes, homeowners’ insurance, HOA dues, or does not maintain the home to FHA standards. These are not unique to reverse mortgages. In fact, the very same rules apply to traditional FHA mortgages. The difference is that with a traditional mortgage, missed monthly mortgage payments themselves can trigger foreclosure, regardless of how much equity you have. With a reverse mortgage, that risk is removed because there are no required monthly mortgage payments.

Another safeguard that comes with reverse mortgages is the non-recourse feature. This means that if your loan balance ever grows larger than the value of your home, you or your heirs will never be responsible for paying the difference. When the home is sold, the lender agrees to accept up to 95% of the appraised value to settle the loan balance:  they cannot touch your other assets. That’s peace of mind a traditional mortgage simply doesn’t offer.

For seniors carrying a low mortgage balance, a reverse mortgage can actually provide more protection against foreclosure than keeping the mortgage they already have. By eliminating mandatory monthly mortgage payments, you relieve strain on your budget and reduce the risk of falling behind and triggering a foreclosure. At the same time, you gain access to your home equity as a flexible financial resource for retirement, without putting your home at any additional risk.

At Freestone Mortgage, we believe in replacing fear with facts. A reverse mortgage doesn’t increase the chance of losing your home to foreclosure: it can actually reduce it. By removing the pressure of required monthly mortgage payments and adding the non-recourse safeguard, a reverse mortgage offers security, stability, and freedom. Don’t let misconceptions hold you back. Take control of your retirement, protect yourself from the real risks of foreclosure, and finally find the peace of mind you deserve in the home you love.