10 Reverse Mortgage Myths Every DFW Homeowner Should Stop Believing
If you’ve lived in North Texas long, you’ve heard half-truths (and outright fiction) about reverse mortgages. As a Certified Reverse Mortgage Specialist serving Dallas–Fort Worth, I spend a lot of time clearing up confusion. Below are the ten most-searched myths—followed by the facts based on current FHA Home Equity Conversion Mortgage (HECM) guidelines.
Free Resource: Want the nitty-gritty details? Download my Reverse Mortgage Starter Kit for checklists, case studies and a Texas-specific eligibility guide.
Myth 1: “The lender takes my house.”
Truth: You stay on title for as long as you live in the home and meet basic obligations ( paying your taxes, insurance, HOA, and upkeep). The lender only holds a lien—just like any traditional mortgage.
Myth 2: “A reverse mortgage is a scam.”
Truth: Today’s HECM program is FHA-insured and tightly regulated. Independent HUD counseling is mandatory before you can close. Nothing could be rather from the truth. I can’t tell you home many lies I have positively impacted, including saving a widow’s home from foreclosure.
Myth 3: “I can’t sell my home later.”
Truth: You can sell anytime. At closing you—or your heirs—simply repay the current loan balance, exactly as with any forward mortgage. You or your heirs keep any remaining equity after loan payoff.
Myth 4: “I’ll owe more than my house is worth.”
Truth: HECMs are non-recourse. Neither you nor your estate can ever owe more than the home’s value at payoff. If you suspect you owe more than the homes value, simply request an appraisal from the mortgage servicer (you will have to pay for it) and you can sell for 95% of the homes appraised value and any remaining debt is covered by the mortgage insurance.
Additional, since the rules changed in 2017 lowering the borrowing limits, it is unlikely a homeowner will owe more than the home’s value unless the loan is 25 years old or more. It all depends on the loans margin rate and the appreciation over time.
Myth 5: “My kids will inherit debt.”
Truth: Heirs may keep the house by paying the lesser of the loan balance or 95 percent of appraised value. Otherwise they can walk away with no personal liability. Remember, you have lived in the home for many years without payments. If you needed money, would the kids have had to pay for your living expenses?
Myth 6: “My house must be paid off first.”
Truth: You only need sufficient equity. Many Dallas retirees use a reverse mortgage to pay off their existing loan and eliminate monthly mortgage payments.
Myth 7: “Reverse mortgage income is taxable and affects Social Security.”
Truth: Proceeds are loan advances, not income—so they’re generally not taxable and do not reduce Social Security benefits. (Means-tested programs such as Medicaid require separate planning.)
Myth 8: “All reverse rates are sky-high and always adjustable.”
Truth: You can choose fixed or adjustable. Current rates are often comparable to forward mortgages, and adjustable lines of credit grow over time. Currently, reverse mortgage rates are much lower than forward rates, especially HELOCS.
Myth 9: “The bank can kick me out if my spouse dies or I travel.”
Truth: As long as one qualifying borrower (or an eligible non-borrowing spouse) lives in the home at least 181 days of the year and remains current on taxes, insurance and maintenance, the loan cannot be called due—regardless of travel.
Myth 10: “I’ll lose Medicare or Medicaid.”
Truth: Medicare is unaffected. Medicaid/SSI only count liquid assets toward eligibility, so with proper structuring most borrowers stay compliant.
Next Steps for DFW Homeowners
- Download the Free Starter Kit for a deeper dive.
- Run the Numbers: Request a no-cost analysis tailored to your home value, age and goals.
- Get Your Questions Answered: Schedule a friendly 15-minute call—no obligation, ever. (214) 945-1066
Start here: MortgageProsUs.com/get-started
About the Author
Richard Woodward, Certified Reverse Mortgage Specialist & Branch Manager
NEXA Mortgage, LLC • NMLS #1660690 | Richard Woodward NMLS #217454
Serving Dallas, Fort Worth, all of Texas, Oklahoma, Colorado, and Kentucky.
Compliance
Equal Housing Opportunity. All loans subject to credit and underwriting approval. Not a commitment to lend. Information is for educational purposes only and is not endorsed by or affiliated with HUD/FHA.
