Reverse Mortgages

Reverse mortgages are designed for homeowners (generally) age 62 or older who want to improve monthly cash flow. Most reverse mortgages are FHA-insured through HUD’s HECM program. Instead of making a mortgage payment each month, the interest is added to the loan balance while you remain responsible for taxes, insurance, and upkeep.

Fast facts

• Age requirement: At least 62 years old.
• Property types: Primary residences only — single-family homes, FHA-approved condos, and manufactured homes built after June 1976.
• Use: Pay off an existing mortgage, create a line of credit, or set up monthly draws.
• Structure: Usually a simple fixed rate or a line of credit style option.

Best fit for you if

• You are on a fixed income and your mortgage payment is squeezing your budget.
• You want to stay in your current home long term.
• You would like to use equity to cover living costs, health care, or quality of life without moving.

Big perks

• No required monthly mortgage payment while you live in the home as your primary residence. The balance just adds to your principal amount, literally a mortgage in reverse. You can pay it down as you would like though as well!
• Can pay off a current mortgage and free up cash flow.
• The unused portion of a HECM line of credit grows over time at the same rate as the loan interest rate — meaning the longer you wait to draw, the more becomes available to you.
• Heirs, and yourself, are allowed to buy or sell the house at 95% of the future value, even if you owe more than that.
• If you owe less than the 95% you just sell as a normal transaction and get to keep the difference!

Keep in mind

• Upfront costs are higher than a standard forward mortgage, so this is very much a planning decision.
• You must keep taxes, insurance, and maintenance current.
• When you move or pass away, the home is usually sold or refinanced by heirs to settle the loan. They also have an option to not deal with that if there isn’t a meaningful amount of equity they can just walk away.
• Counseling is required so you fully understand how the program works.

Common questions

Will I still own my home?

Yes. You remain on the title and own the home. The lender does not take ownership — the reverse mortgage is simply a lien against the property, the same as a regular mortgage.

Can I get a reverse mortgage if I still have a balance on my current mortgage?

Yes, and this is one of the most common reasons people use it. The reverse mortgage pays off the existing balance at closing, which is what eliminates the monthly payment.

How much can I borrow?

It depends on your age, the home’s appraised value, and current interest rates. Generally, the older you are and the more equity you have, the more is available. We run the numbers specific to your situation — use the form below to get started.

What happens when I pass away or move out?

The loan becomes due. Heirs can sell the home, refinance into a traditional mortgage to keep it, or — if there’s little equity — simply walk away with no personal liability. FHA insurance covers any shortfall between what’s owed and what the home sells for.