Are Reverse Mortgages Safe?

Reverse mortgages have many myths – some of which aren’t the best. Many people think they are ‘dangerous’ and seniors in San Diego shouldn’t consider one. But until you know the truth about the reverse mortgage and how it works, you don’t know how beneficial it can be.


With the right lender and proper education, a reverse mortgage can be one of the best moves a senior who wants to age in place can make.

What is a Reverse Mortgage?

If you aren’t familiar, a reverse mortgage is a mortgage that taps into your home’s equity, allowing you to supplement your retirement income and remain in your home. Unlike a traditional mortgage, you don’t make monthly payments. Instead, you or your loved ones repay the mortgage when you move or pass away, whichever occurs first.

What Makes Reverse Mortgages in San Diego Safe?

Despite the myths, there are many reasons reverse mortgages in San Diego are safe including:

  • You must qualify for the loan. The FHA has strict guidelines including all borrowers must be at least 62 years old; you must have a large amount of equity; you must be able to afford the home maintenance, taxes/insurance, and you must undergo HUD counseling to ensure you understand the loan.
  • Reverse mortgages are non-recourse loans. This means you’ll never owe more than the home’s value. If home values decline before you or your heirs sell the home, the lender can only require the home’s value as repayment, even if it’s less than the balance of your reverse mortgage.
  • The FHA insurance protects borrowers too. FHA insurance typically only protects lenders, but with a reverse mortgage, you’re protected too. If your lender goes out of business, you’re still entitled to the funds owed to you on the reverse mortgage.
  • You can do what you want with the funds. Many people believe you’re forced to use the funds a certain way, but that’s not the case. Reverse mortgage lenders can’t dictate how you use the funds unless you have a remaining balance on your first mortgage. You will be required to pay that balance off first, but the remaining funds are yours to use as you wish.

The Downside of Reverse Mortgages

Of course, every financial product has a downside, and reverse mortgages are no exception. The largest risk is you can lose your home, just like you could with a traditional mortgage. If you don’t make your tax and insurance payments or fail to keep up with the home, the lender can foreclose on you just like they would with a traditional mortgage.


But, because lenders do their due diligence and ensure you can afford the home’s upkeep, taxes, and insurance most people don’t foreclose on a reverse mortgage.

Final Thoughts

Reverse mortgages in San Diego are a great way to age in place. More homeowners are realizing its benefits and understanding its safety, taking advantage of their home’s equity – the money they worked hard to earn.


A reverse mortgage is a great way to supplement your retirement income, ensure you can stay in your home, and enjoy the equity you’ve built up. If you would like to know more about the reverse mortgage program, download my free by visiting This limited time offer will help you understand how the reverse mortgage works and see why it’s a beneficial program for seniors in San Diego.

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