For many homeowners in or nearing retirement, the thought of using home equity to support their financial future is appealing—but also filled with questions. One of the most common and important questions we hear is:
“If I take out a reverse mortgage, do I still own my home?”
Short answer: Yes, you do. But let’s dive deeper to clear up the confusion and help you understand exactly how ownership works with a reverse mortgage.
What Is a Reverse Mortgage and How Does It Work?
A reverse mortgage is a specialized loan that allows homeowners aged 62 or older to convert a portion of their home’s equity into cash—without having to sell, move, or make monthly mortgage payments.
Instead of making payments to the lender each month (as you would with a traditional mortgage), the lender pays you—either as a lump sum, monthly payments, a line of credit, or a combination. The loan is repaid when the last borrower:
- Sells the home
- Moves out permanently
- Or passes away
This structure can offer added financial flexibility during retirement, especially for those looking to boost cash flow, eliminate an existing mortgage, or cover healthcare expenses.
Do You Still Own Your Home with a Reverse Mortgage?
Yes—you retain full ownership of your home. The title stays in your name, not the lender’s. That means:
- You’re still listed on the deed
- You can live in the home as long as you want
- You can make renovations or sell the home at any time
However, as with any mortgage, you still have responsibilities. You must:
- Live in the home as your primary residence
- Pay property taxes and homeowners insurance
- Keep the home in good condition
Failing to meet these obligations can result in the loan becoming due earlier than expected.
What Happens If You Sell the Home or Decide to Move?
You’re in control. If you choose to sell your home, the reverse mortgage must be repaid from the proceeds of the sale. Any remaining equity is yours to keep. You can also pay off the loan at any time without penalty, allowing you the freedom to relocate or make other financial moves as needed.
What Happens When You Pass Away?
When the last borrower passes away or permanently leaves the home, the loan becomes due and payable. Here’s what happens next:
- Your heirs have options. They can repay the loan and keep the home, or sell the home and use the proceeds to pay off the reverse mortgage.
- FHA-insured protections apply. With government-backed reverse mortgages (also known as HECMs), your heirs will never owe more than the home’s appraised value, even if the loan balance exceeds the market value.
- Remaining equity belongs to your estate. If the home sells for more than what’s owed, the surplus goes to your heirs or estate.
Common Misconception: “The Bank Takes My Home”
This is one of the biggest myths about reverse mortgages. The bank does not take ownership of your home. You remain the homeowner for as long as you meet the loan terms.
Reverse mortgages are non-recourse loans, meaning the lender can only be repaid from the value of the home—not from other assets in your estate.
Is a Reverse Mortgage Right for You?
A reverse mortgage isn’t for everyone, but it can be a powerful financial tool for the right homeowner. If you’re looking to:
- Supplement retirement income
- Eliminate your existing monthly mortgage payment
- Fund medical care or home improvements
- Stay in your home longer
- Purchase a new primary residence using a reverse mortgage
—then it might be worth exploring.
Final Thoughts: Your Home, Your Terms
With a reverse mortgage, you’re not giving up your home—you’re unlocking its value. It’s about putting the equity you’ve built to work for you, while still enjoying the security and comfort of the place you call home.
Have Questions About Reverse Mortgages? Let’s Talk.
At Supreme Lending Dallas-Fort Worth, our dedicated Reverse Mortgage Specialists are here to help you understand the process, weigh your options, and make the best decision for your goals and lifestyle.
No pressure. Just clear answers.
Schedule a free, no-obligation consultation today.
Disclaimer
Borrowers must continue to pay property taxes, homeowners insurance, and maintain the home. Failure to meet these obligations may result in foreclosure. Not all applicants will qualify. This is not a commitment to lend. All loans are subject to program guidelines and credit approval. Terms and conditions subject to change without notice. These materials are not from HUD or FHA and were not approved by HUD or any government agency.
Supreme Lending Dallas-Fort Worth is a registered DBA of Everett Financial, Inc., NMLS #2129. 14801 Quorum Dr., #300, Dallas, TX 75254. For licensing information, visit www.nmlsconsumeraccess.org.