When consulting in San Antonio, I often encounter misunderstandings about reverse mortgages. Common questions include whether it means giving the house to the bank or if children will inherit debt. A recent client was hesitant to even consider it due to these misconceptions, but after discussing each point, their perspective changed.

To clarify the facts, a reverse mortgage is a product that allows homeowners aged 62 and older to receive funds from a lender using their home equity as collateral. The ownership does not transfer to the bank; the homeowner's name remains on the title. Instead of making monthly payments, the loan is repaid when the home is sold, the owner passes away, or the home is no longer used as the primary residence.

The misunderstanding that children will inherit debt is also unfounded. The HECM, which is insured by the Federal Housing Administration, has a non-recourse structure, meaning that if the home value falls below the loan balance, heirs are not required to pay the difference thanks to FHA insurance. However, if heirs wish to inherit the home, they must repay the loan balance or refinance.

Eligibility requirements include being at least 62 years old, the home must be the primary residence, and passing a financial assessment to ensure the ability to continue paying property taxes and insurance. As of May 2026, the average home value in the San Antonio area is approximately $251,000, reflecting a 2.1 percent decrease from the previous year.

The advantage is that it allows for living expenses or medical costs without monthly repayment burdens. However, it is important to address the misconception that this is always a favorable choice. Costs must also be considered.

When factoring in origination fees, mortgage insurance premiums, and closing costs, the initial costs can be higher than a traditional mortgage. The mortgage insurance premium starts at about 2 percent initially, with an additional 0.5 percent added annually.

San Antonio is also known as a city that consistently attracts retirees. For families moving from other states, there may be discrepancies between property taxes or insurance based on their previous residence, so it is necessary to verify local tax rates and insurance costs upon settling in.

The effective property tax rate in Bexar County, where San Antonio is located, is about 1.55 percent, which is higher than the Texas average. When combined with school district and city taxes, the total tax rate can range from 2.5 percent to 2.9 percent depending on the area. Even after obtaining a reverse mortgage, the homeowner is still responsible for these taxes and insurance, and failure to pay can lead to foreclosure risk.

Another common concern is the fear that elderly parents could suddenly be evicted from their homes. In reality, as long as the owner continues to reside in the home as their primary residence, they are not required to repay the loan. However, if they stay in a hospital or nursing facility for an extended period and no longer meet the primary residence requirement, this could be an exception, so it is important to check the contract terms in advance.

In areas like San Antonio, where the elderly population is steadily increasing, there tends to be a rise in promotions or advertisements related to reverse mortgages. If you feel pressured by sales tactics disguised as free seminars or home visits, it is wise to take your time and verify the facts through a HUD-approved counseling agency. The best way to distinguish between these misunderstandings and the facts is ultimately to visit a HUD-approved counseling agency directly. It is essential to develop a habit of verifying through official channels rather than relying solely on online reviews or personal anecdotes.

Over time, the equity may decrease, which is a reality that could reduce the assets left for children. Texas has a lower percentage of residents aged 65 and older at 14 percent compared to the national average, making it easier for exaggerated advertising or misinformation targeting retirees to spread, so it is important to verify each claim.

Ultimately, once the misunderstandings are cleared away, what remains is to compare the pros and cons as they are. An obligatory counseling session with a HUD-approved agency is required before applying for HECM. I hope you discuss this thoroughly with your family before making a decision. This article is not investment or legal advice, and I recommend consulting a professional before entering into any agreements.