As a REALTOR, you’ve probably had clients ask about reverse mortgages. Maybe you’ve even had a listing where the seller used one. But if you’re like many agents, you might feel uncertain about how to handle these situations and what reverse mortgage information is accurate and what is false.

You’re not alone. Many REALTORS hesitate when reverse mortgages come up in conversation. They worry about giving wrong advice or steering clients in the wrong direction. The truth is, much of this hesitation comes from outdated or incorrect reverse mortgage information that’s been floating around for years.

Here’s the good news: reverse mortgages have changed a lot over the past decade. New regulations and protections have made them safer and more transparent. Understanding the real facts can help you serve your senior clients better and open up new opportunities in your business.

Myth vs. Reality Precap

Let’s clear up five common myths that might be holding you back:

1. Myth #1: The bank will own my client’s home. When you understand that homeowners keep their title and ownership, you can confidently reassure clients and avoid losing listings to agents who know the facts.
2. Myth #2: Reverse mortgage information is too complex. Once you realize you only need to know the basics (not become an expert), you can have these conversations without fear and still position yourself as a knowledgeable resource.
3. Myth #3: Reverse mortgages are a last resort for desperate seniors. Knowing that affluent clients use them strategically opens doors to work with wealthy retirees you might otherwise miss.
4. Myth #4: Getting accurate information takes too much time. Learning that you can master the essentials in one afternoon means this knowledge is actually one of the easiest ways to differentiate yourself in the senior market.
5. Myth #5: Reverse mortgages will hurt my reputation. Understanding the strong federal protections now in place lets you discuss this option without worry and builds trust with families navigating difficult decisions.

Now let’s dive deeper into each myth and what the reality means for your business.

Myth #1: The Bank Will Own My Client’s Home

This biggest of all reverse mortgage myths looms large out there, and it stops many REALTORS from even discussing reverse mortgages with their clients.

The Reality: Homeownership for reverse mortgage borrowers is no different than homeowners for traditional “forward” mortgage borrowers. Your clients keep the title to their home. They own it, just like they did before getting the reverse mortgage. The lender places a lien on the property (just like a traditional mortgage), but ownership stays with the homeowner.

Reverse Mortgage Information about Homeownership

The confusion often comes from what happens when the loan becomes due. Yes, the loan must be repaid when the homeowner passes away, sells the home, or permanently moves out. That should sound pretty familiar, since it mostly mirrors traditional mortgage loan repayments.

Heirs have options, though. They can pay off the loan and keep the house, sell the home and keep any remaining equity, or walk away if the home is worth less than the loan balance.

According to the U.S. Department of Housing and Urban Development, the Home Equity Conversion Mortgage (HECM) program includes protections that prevent borrowers or their heirs from owing more than the home’s value. This is called a non-recourse loan feature. The lender cannot seek repayment through any other means (e.g. no going after other assets, accounts, or heirs’ property).

When you share accurate reverse mortgage information with clients, they can make better decisions about their retirement finances. You become a trusted advisor instead of someone who avoids difficult conversations.

Myth #2: Reverse Mortgage Information Is Too Complex for My Clients to Understand

Many realtors worry that reverse mortgages are too complicated to explain. They fear confusing their clients or making mistakes in their explanation.

The Reality: Modern reverse mortgages are more straightforward than you think. Yes, they work differently than traditional mortgages. But the basic concept is simple: instead of making monthly payments to a lender, the lender makes payments to the homeowner.

Reverse Mortgage Information Simplified

Your role as a realtor isn’t to act as a reverse mortgage expert. Your role is to recognize when a client might benefit from exploring this option and connect them with qualified reverse mortgage specialists. Think of it like referring clients to a home inspector or an attorney. You don’t need to know every technical detail.

Here’s what you do need to know:

1. FHA-insured reverse mortgages are available to homeowners 62 and older, and proprietary reverse mortgages are available to homeowners as young as 55 in most states
2. The home must be the borrower’s primary residence (6 months + 1 day per year)
3. Homeowners must continue paying property taxes, insurance, and keep the property livable (just like traditional mortgage requirements)
4. Borrowers must complete a one-hour HUD-approved counseling before underwriting can start
5. The loan becomes due when the last borrower dies, sells, or moves out permanently
6. The home cannot be used as a business (e.g. Bed and Breakfast, Airbnb, rental property, etc.)

That’s it. Those six points cover the essentials. When you know these basics, you can have confident conversations with senior clients about whether reverse mortgage information might be worth exploring further.

Myth #3: Reverse Mortgages Are a Last Resort for Desperate Seniors

Some REALTORS view reverse mortgages as a sign of financial trouble. They assume clients who ask about them are struggling and have no other options.

The Reality: Today’s reverse mortgage borrowers often have strong financial profiles. They may use reverse mortgages as a strategic retirement planning tool, not a desperation move.

Reverse Mortgage Information in Retirement Planning

Informed financial planners often recommend reverse mortgages in various situations:

• Creating a buffer during market downturns to avoid selling investments at a loss
• Delaying Social Security to increase future benefits
• Funding home improvements to age in place safely
• Eliminating existing mortgage payments to improve cash flow
• Providing a line of credit that’s guaranteed to grow over time

Research from the Consumer Financial Protection Bureau shows that many borrowers use reverse mortgages to improve their overall retirement strategy, not because they have no other options.

When you understand this shift, you can have different conversations with affluent senior clients. You’re not suggesting something shameful. You’re discussing a legitimate financial tool that many successful retirees use strategically.

Myth #4: Getting Accurate Reverse Mortgage Information Takes Too Much Time

Busy realtors often avoid learning about reverse mortgages because they assume it requires extensive training or certification. They worry about the time commitment.

The Reality: You can learn the basics in an afternoon. Many reverse mortgage lenders offer free training sessions specifically designed for realtors. These sessions usually last 60 to 90 minutes and cover everything you need to know. Even better, take advantage of the HECM Coach’s free HECM for Purchase Mini-course for Realtors at your own pace and on your own schedule. It takes just an hour or two and equips you with invaluable reverse mortgage information to turn your business into a juggernaut.

Reverse Mortgage Information from the Experts

You don’t need to become a reverse mortgage loan officer. You just need enough knowledge to recognize opportunities and make informed referrals. The reverse mortgage specialist will handle the detailed explanations and paperwork.

Building a relationship with one or two reputable reverse mortgage lenders can streamline the process even more. When you have trusted partners, you can quickly connect clients with experts who will take good care of them. Of course, I invite you to connect with the HECM Coach to get your questions answered and discuss how basic mastery of reverse mortgage information can jumpstart your business.

The time investment pays off. The 50-plus demographic controls a huge portion of real estate wealth. When you can confidently discuss reverse mortgages, you differentiate yourself from other agents who avoid the topic. You become the go-to realtor for senior clients and their families.

Myth #5: Reverse Mortgages Will Hurt My Reputation

Perhaps the most damaging myth is that reverse mortgages are somehow shady or predatory. Some realtors fear that recommending them will damage their professional reputation.

The Reality: Reverse mortgages have come a long way since their early days. The Federal Housing Administration has insured most reverse mortgages for decades through the HECM program, which includes strong consumer protections.

Reverse Mortgage Information to Counter Scams

Reverse mortgages require safeguards that include:

• Mandatory independent counseling before underwriting can even begin
• Caps on fees and closing costs
• Non-recourse protection (borrowers never owe more than the home’s value)
• Financial assessments to ensure borrowers can afford ongoing expenses
• Spousal protections that didn’t exist in older reverse mortgages

These protections have dramatically reduced the problems that gave reverse mortgages a bad reputation years ago. When you provide current reverse mortgage information based on today’s regulations, you’re helping clients access a legitimate financial tool with proper oversight.

Don’t Confuse Reverse Mortgages with These Dodgy Alternatives

Because most seniors have a very minimal understand of how reverse mortgages work, they often confuse them with the following scams and predatory products:

1. Home Equity Investment Agreements (also called Home Equity Sharing Agreements): These contracts promise cash without monthly payments. However, according to the National Consumer Law Center, lenders can claim up to 70% of your home’s future value in exchange for relatively small upfront cash. The contracts often exceed 100 pages and include confusing terms. When the contract term ends (often just 10 years), homeowners face massive balloon payments or foreclosure. Unlike reverse mortgages, these products lack federal oversight and consumer protections.
2. Loan Flipping Scams: Predatory lenders target seniors and convince them to repeatedly refinance their mortgages. Each refinance includes high fees and points that strip away equity. The monthly payments might look lower at first, but the homeowner ends up with more debt stretched over a longer term. Legitimate reverse mortgages don’t involve repeated refinancing or upfront fees for each transaction.
3. Deed Theft (also called Title Fraud): According to the FBI, scammers forge deeds or trick seniors into signing documents that transfer home ownership. The New York State Attorney General reports over 3,400 deed theft complaints since 2014 in New York City alone. Criminals especially target seniors who own their homes outright. With reverse mortgages, homeowners always keep the title to their property. The lender never takes ownership.

When you understand the difference between FHA-insured reverse mortgages and these predatory schemes, you protect your clients from real harm. You also build trust with families who worry about their aging parents becoming victims.

Your reputation actually benefits when you educate yourself on topics that other REALTORS avoid. Families appreciate agents who can discuss difficult topics like aging in place, downsizing, and retirement finances. You become known as someone who truly cares about senior clients’ wellbeing.

Moving Forward With Confidence

Reverse mortgage information doesn’t have to feel intimidating. When you understand the facts to counter the myths, you can serve your senior clients more effectively.

Start small. Connect with a reputable reverse mortgage lender in your area. Attend the HECM Coach’s free mini-course. Ask questions. Learn the basics. You don’t need to become an expert overnight.

Then, when senior clients ask about their options, you’ll feel confident having that conversation. You’ll know when to explore reverse mortgage information further and when to suggest other solutions. You’ll be able to make informed referrals to specialists who can help.

The senior housing market will continue growing as baby boomers age. REALTORS who understand reverse mortgages will have a competitive advantage. Those who don’t will miss opportunities to serve this important demographic.

The choice is yours. You can continue hesitating based on myths, or you can learn the facts and become a trusted resource for senior clients. The reverse mortgage information you need is readily available. The question is whether you’re ready to seek it out.

Your senior clients deserve an agent who can discuss all their options with confidence and knowledge. By understanding reverse mortgages, you become that agent.