Myth or Fact – Does the Bank Own My Home with a Reverse Mortgage?
Reverse Mortgage Myth: The Bank Owns The Home
Reverse Mortgage Fact: No, the bank does not own your home, you remain the legal owner and hold the title
No, the bank doesn’t own your home with a reverse mortgage—not in the sense of taking ownership while you’re still there. You’re still the legal owner and hold the title. The bank, though, has a lien on the property, which is their way of securing the loan they’ve given you.
In a reverse mortgage, they pay you based on your home’s equity—could be a lump sum, monthly checks, or a credit line—and you don’t pay them back monthly like a traditional mortgage.
Instead, the loan balance, plus interest, piles up over time. When you pass away, move out for good, or sell the home, the loan gets repaid from the proceeds.
So, you own the home, but the bank is tied to it financially until the loan is repaid.
- With a reverse mortgage, you remain the owner of your home. You do not transfer the title to the lender.
- A reverse mortgage is essentially a loan that allows you to access a portion of your home’s equity and there are not payments until the loan is repaid.
In summary, a reverse mortgage allows you to borrow against your home’s equity while retaining ownership.
Reverse mortgages can be a useful financial tool for eligible seniors looking to supplement income, pay for healthcare, or cover living expenses, but they also come with complexities that should be thoroughly understood before proceeding.
Learn more about eligibility requirements for a reverse mortgage, situations where a reverse mortgage is best used, and common myths around reverse mortgage that we debunk with facts