There is a lot of misinformation out there about reverse mortgages and this has confused and scared many senior citizens away from this unique type of home loan. It is really a shame that 'myths' about reverse mortgages have distorted the true specifics of this excellent loan program that has helped so many seniors. Don't be misled by these reverse mortgage myths. Read on as we set straight the most common myths about reverse mortgages.

• The bank takes ownership of your home

This is a bold untruth. You retain ownership of your home and the title to your home stays in your name. The bank or lending institution cannot take possession of your home even at the time of your death which at that time your home's title would transfer to a survivor you elect and not the reverse mortgage lender.

• The lender can sell your home when the reverse mortgage is due

This is also false. You or your survivors may choose to sell your home to repay the loan if that is your wish, or you or your survivors may keep your home and repay the loan through another source of financing.

• You can't take out a reserve mortgage if you already have a conventional mortgage on the home

In fact, equity in your home and property converts into cash with a reverse mortgage. This means you can use that cash to live on and use it to pay back a mortgage you presently have on your home. The only hassle you could encounter would be if you owe more on your present mortgage than the equity your home and property has.

• All seniors are better off selling their property and moving to a smaller home

This is misleading because although that may be the right decision for some senior citizens, it is not for everybody. Hiring a real estate agent to oversee the sale of your home or even selling your home yourself can be a costly and cumbersome task, and it may take quite awhile to find a buyer for your home. Finding a new residence for yourself to live in could also cost you more money than a move to a smaller home would be worth. Only you know for certain if such a move would be the right choice for you. Don't however let this misleading statement that "all' seniors should do this cause you to make a decision you may regret afterwards. It might be wise to speak with a financial expert to determine whether this might be the right decision given your present finances if you are uncertain of what to do.

• Getting a reverse mortgage will make your children unhappy or angry

This lie plays on every good parent's desire to make their children happy. Of course, you may want to speak with your children about your considering of a reverse mortgage if they were expecting to inherit the house one day. However, the final decision is yours to make and most adult children would rather have their parents be able to stay in their homes and to have financial security than worry about inheriting your home when you die. You should also know that the remaining equity in your home is used to pay only the amount you owe on your reverse mortgage when it is due. If the equity in your home and property is above this, your children will receive it after your death.

• A reverse mortgage might cost more than your home is worth

This is a scare tactic used by a minority of mortgage companies wanting to sell senior citizens on the mortgage packages they offer. Protections are in place to prevent anyone from ever owing more than the value of their homes on a reverse mortgage.

• You might lose Social Security or Medicare benefits

This myth of reverse mortgages probably causes the greatest fears among seniors who depend upon their benefits for day-to-day living, medications, health care, and other life essentials. In general, most people's benefits will not change due to a reverse mortgage. People receiving SSI can possibly have their benefits affected by a reverse mortgage in some cases. Seniors should speak to their benefits and financial advisors to learn whether a reverse mortgage would affect their benefits in any way.

• You don't get to choose how the money is spent

This is absolutely not true. You can spend your money however, you wish to whether it is to pay for household bills, pay debts you owe, gift your children with, to fund travel, or help a grandchild pay for a college education. You have total control over how this money is spent.

• You must pay tax on the money you receive

This is a falsehood. Cash from a reverse mortgage is tax-free.

Don't be misled by any of these myths about reverse mortgages - not now that you know they are without substance.