A common reverse mortgage myth is that reverse mortgage lenders take advantage of seniors. As a potential borrower, you want to make sure that you are dealing with businesses who are members of the Better Business Bureau. One Reverse Mortgage received an A+ rating from the Better Business Bureau and is a member of the National Reverse Mortgage Lenders Association, whose code of conduct we take very seriously. As a lender, our goal is to help you make the most out of your retirement.

One thing I find unique about One Reverse Mortgage is that our licensed experts take the time to understand your financial situation and retirement goals so that they can honestly determine whether or not a reverse mortgage is going to meet your retirement needs. Not only that, but a licensed expert will help advise which loan option is appropriate for your situation. When you hear stories of seniors “scammed” by reverse mortgages it is often only because they have not been properly educated and have therefore taken out a loan option that does not best meet their financial needs.


Here is a basic breakdown of the decisions you will make during the reverse mortgage process:

  1. Decide whether or not a reverse mortgage is right for you
  2. Decide how you want to receive the tax-free cash* from the loan: Do you want a fixed lump sum, line of credit, or will you be using the funds to purchase a new home?
  3. Pay off an existing mortgage if needed
  4. Spend remaining funds however you see fit


The beauty of the reverse mortgage is that it is a loan that provides security without taking away any of your financial freedom. With a reverse mortgage, it is up to the borrower to determine how to use the loan.

Lump Sum vs. Line of Credit:

You can receive the loan in a lump sum payment where all of the money will be given to you at once during closing. The other option is to receive your loan using a line of credit that can be drawn on whenever you see fit. These are known as the HECM Fixed (lump sum) and HECM Line of Credit Options. A HECM (“heck-um”) product stands for Home Equity Conversion Mortgage. This term often comes up when talking about reverse mortgages and this is because it is the term that the Federal Housing Administration (FHA) uses for a reverse mortgage loan. A third option, a HECM for Purchase, is for borrowers who wish to use the money from a reverse mortgage to purchase a new home. Click here to read a recent post explaining the Reverse for Purchase option.


Pay off an Existing Mortgage:

One of the most common questions that we receive regarding reverse mortgages is whether or not a reverse mortgage can be taken out if there is already a mortgage on the borrower’s home. The answer is, of course! An existing mortgage will be paid off at closing. This will enable you to enjoy the financial freedom that comes with eliminating your monthly mortgage payment**. Not only that, but any excess funds from the loan can be used for whatever you would like. Common uses for the loan are to pay off credit card bills, make car payments, pay medical bills, or you can use the money to travel, make home improvements, and enjoy leisure activities that could make your retirement more enjoyable.

On the other hand, if you already own your home free and clear a reverse mortgage could be the ideal solution to provide you with more financial security in retirement. Without needing to use a portion of the loan to pay off your existing mortgage you will be able to use the loan in its entirety at your discretion.


Choosing which loan you take will depend on your financial situation. When you call One Reverse Mortgage, a licensed banker familiar with your home state will be more than happy to answer any of your questions and help determine whether or not a reverse mortgage is right for you.

*Please consult with your financial advisor.
**Homeowner is still responsible for taxes, insurance, and property maintenance.