Reverse Mortgage
Access the Equity in Your Home
A reverse mortgage (HECM) allows homeowners aged 62+ to convert a portion of their home equity into cash, without monthly mortgage payments. Designed for retirees who want to age in place with financial peace of mind.
- Age 62+
- Primary Residence
- Tax-Free Proceeds
- No Monthly Payments
What is a Reverse Mortgage
Turn Your Home Equity Into Cash
A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), is a loan that allows homeowners aged 62 and older to convert a portion of their home’s equity into cash. Unlike a traditional mortgage, you don’t make monthly payments, the loan is repaid when you sell the home, move out permanently, or pass away.
The loan is insured by the Federal Housing Administration (FHA), providing protection for both the borrower and the lender. You retain ownership of your home and can live in it as long as you maintain the property, pay property taxes, and keep homeowners insurance current.
Proceeds from a reverse mortgage can be used for any purpose, supplementing retirement income, paying for healthcare, home renovations, eliminating debt, or simply improving your quality of life.
Home Equity Conversion Mortgage (HECM)
FHA-insured reverse mortgage designed for seniors 62+.
” No monthly mortgage payments. The loan is repaid when you leave the home.
- FHA-insured
- Tax-free proceeds
- Stay in your home
How It Works
Simple Steps to Access Your Equity
The reverse mortgage process is straightforward. Here’s how it works from start to finish.
Eligibility Check
Verify you’re 62+, own your home, and have sufficient equity. We’ll review your financial situation and goals.
Counseling Session
FHA requires independent counseling to ensure you understand the loan terms, costs, and alternatives.
Application & Appraisal
Complete the application. A professional appraisal determines your home’s value and available equity.
Receive Your Proceeds
Choose your payment option, lump sum, monthly payments, line of credit, or a combination. Funds are tax-free.
Eligibility
Who Qualifies for a Reverse Mortgage?
Reverse mortgages are designed for seniors who want to access their home equity. Here are the key eligibility requirements.
Age Requirement
All borrowers must be at least 62 years old. If you’re married, both spouses must meet the age requirement.
✓ 62+ years old
Primary Residence
The home must be your primary residence where you live most of the year. Eligible property types include single-family homes, condos, and townhouses.
✓ Primary residence
Sufficient Equity
You must have enough equity in your home to qualify. The amount you can borrow depends on your age, home value, and current interest rates.
✓ Adequate equity
Additional Requirements: You must maintain the property, pay property taxes and homeowners insurance, and keep the home in good condition.
Benefits
Why Choose a Reverse Mortgage
Reverse mortgages offer unique advantages for retirees looking to improve their financial security and quality of life.
Tax-Free Proceeds
Funds from a reverse mortgage are not taxable, they’re considered loan proceeds, not income. You can use the money for any purpose.
No Monthly Payments
Unlike a traditional mortgage or HELOC, you don’t make monthly payments. The loan is repaid when you leave the home permanently.
Stay in Your Home
You retain ownership and can continue living in your home as long as you meet the loan obligations, property taxes, insurance, and maintenance.
FHA-Insured
Reverse mortgages are insured by the Federal Housing Administration, providing protection for both borrowers and lenders.
Flexible Payment Options
Choose how you receive your proceeds, lump sum, monthly payments (term or tenure), line of credit, or a combination of options.
Growing Line of Credit
With a reverse mortgage line of credit, the unused balance grows over time, giving you access to more funds when you need them.
Ways to Use
What Can You Do With Reverse Mortgage Proceeds?
Reverse mortgage proceeds can be used for any purpose, here are some of the most common ways seniors use their funds.
Supplement Retirement Income
Healthcare & Medical Expenses
Home Renovations & Repairs
Pay Off Existing Debt
Travel & Leisure
Help Family Members
The proceeds are yours to use as you see fit, there are no restrictions on how you spend the money.
Loan Types
Types of Reverse Mortgages
There are several types of reverse mortgages available. The HECM (Home Equity Conversion Mortgage) is the most common and FHA-insured.
HECM - Home Equity Conversion Mortgage
The most common type of reverse mortgage, insured by the FHA. Available through approved lenders with federally insured protections.
- FHA-insured for borrower protection
- Flexible payment options
- Non-recourse, you'll never owe more than the home's value
- Available for primary residences
HECM for Purchase
Use a reverse mortgage to purchase a new primary residence. This option allows seniors to buy a new home with no monthly mortgage payments.
- Buy a new home with a reverse mortgage
- No monthly mortgage payments
- Down payment required (varies by age and home value)
- Must be your primary residence
Proprietary Reverse Mortgage
Private reverse mortgages offered by lenders that are not FHA-insured. Designed for homeowners with higher-value properties that exceed HECM limits.
- Higher loan limits than HECM
- Not FHA-insured
- Typically for high-value properties
- May have different terms and costs
Important Considerations
What to Know Before You Apply
Reverse mortgages offer great benefits, but they also come with important considerations to keep in mind.
Closing Costs & Fees
Reverse mortgages have upfront costs including origination fees, mortgage insurance premiums, closing costs, and servicing fees. Many of these can be financed into the loan.
Impact on Estate
Your heirs will need to repay the loan when you leave the home, either by selling the property or refinancing the balance. The loan is non-recourse, meaning they'll never owe more than the home's value.
Ongoing Obligations
You must continue to pay property taxes, homeowners insurance, and maintain the property. Failure to do so could result in foreclosure.
Counseling Requirement
FHA requires all borrowers to complete independent counseling with a HUD-approved counselor before applying. This ensures you understand the loan terms and alternatives.
Important: A reverse mortgage is a loan, not a gift. The loan balance grows over time as interest accrues. It’s important to understand the long-term implications.
Got Questions?
Reverse Mortgage FAQs
Common questions about reverse mortgages, eligibility, and the process.
What is a reverse mortgage?
A reverse mortgage (HECM) is a loan that allows homeowners aged 62+ to convert a portion of their home equity into cash, without monthly mortgage payments. The loan is repaid when you sell the home, move out permanently, or pass away.
Who is eligible for a reverse mortgage?
To qualify, you must be at least 62 years old, own your home as your primary residence, and have sufficient equity. You must also maintain the property and pay property taxes and homeowners insurance.
Do I make monthly payments on a reverse mortgage?
No. Unlike a traditional mortgage, you don’t make monthly payments on a reverse mortgage. The loan balance grows over time and is repaid when you leave the home permanently.
How much money can I get from a reverse mortgage?
The amount depends on several factors: your age (older = more), your home’s value and equity, current interest rates, and the loan type. A lender can provide a personalized estimate.
Can I lose my home with a reverse mortgage?
You can lose your home if you fail to meet the loan obligations, not paying property taxes or homeowners insurance, failing to maintain the property, or moving out permanently. As long as you meet these obligations, you can stay in your home.
What happens to my reverse mortgage when I pass away?
When you pass away, your heirs have options: they can sell the home to repay the loan, refinance the balance with a traditional mortgage, or pay off the loan with other funds. Because reverse mortgages are non-recourse, they’ll never owe more than the home’s value.
Is the money from a reverse mortgage taxable?
No. Reverse mortgage proceeds are considered loan proceeds, not income. They are not taxable and do not affect your Social Security or Medicare benefits.
What is the difference between a reverse mortgage and a HELOC?
A HELOC (Home Equity Line of Credit) requires monthly payments and is available to homeowners of any age with sufficient credit. A reverse mortgage has no monthly payments and is only available to homeowners aged 62+. The reverse mortgage is also FHA-insured.
What are the costs associated with a reverse mortgage?
Costs include origination fees, mortgage insurance premiums, closing costs, and servicing fees. Many of these costs can be financed into the loan. The HUD-approved counseling session is also a requirement.
Can I use a reverse mortgage to buy a new home?
Yes. The HECM for Purchase program allows seniors to buy a new primary residence with a reverse mortgage. You’ll need to make a down payment (which varies based on your age and the home’s value) and then you’ll have no monthly mortgage payments.
Ready to Explore Reverse Mortgage Options?
Our reverse mortgage specialists can help you understand your options and determine if a reverse mortgage is right for you. Get started with a free, no-obligation consultation.
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