Reverse Mortgages
Retirement & Home Equity
Reverse Mortgages
A reverse mortgage allows eligible homeowners age 62 or older to access a portion of their home equity without making monthly mortgage payments — subject to important obligations and conditions.
Who May Benefit
- Homeowners age 62 or older with significant home equity
- Those who want to supplement retirement income without selling their home
- Borrowers who want to eliminate their existing mortgage payment
- Those who understand the obligations and have completed HUD-approved counseling
- Homeowners who plan to remain in the home long-term
How It Generally Works
The most common reverse mortgage is the Home Equity Conversion Mortgage (HECM), insured by the FHA. HECMs require the borrower to be at least 62, occupy the home as a primary residence, and complete HUD-approved counseling before proceeding.
With a reverse mortgage, interest and fees accrue over time and are added to the loan balance — the balance grows rather than shrinks. Repayment becomes due when the last borrower leaves the home, sells, or passes away. The borrower must continue to pay property taxes, homeowners insurance, and maintain the property.
Key Considerations
Age 62 Minimum
HECMs require the youngest borrower or eligible non-borrowing spouse to be at least 62. Proprietary reverse mortgage products may have different age requirements.
HUD-Approved Counseling Required
Before applying for a HECM, borrowers must complete a counseling session with a HUD-approved housing counselor. This is a federal requirement, not optional.
Growing Loan Balance
Interest and fees accrue over time and are added to the loan balance. The balance grows rather than shrinks. This reduces the equity available to heirs when the loan becomes due.
Ongoing Obligations
Borrowers must continue to pay property taxes, homeowners insurance, and HOA fees, and maintain the property. Failure to meet these obligations can trigger repayment.
Reverse mortgages are complex financial products. HUD-approved counseling is required for HECMs. Interest and fees increase the loan balance over time. Repayment is due upon sale, vacancy, or death. Not all homeowners will qualify. This is educational information only, not financial advice.
Frequently Asked Questions
Exploring Reverse Mortgage Options?
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