Reverse Mortgage

A reverse mortgage is a loan for older homeowners that lets you convert part of your home equity into cash, and repayment is typically due when you sell, move out, or pass away. Instead of you paying the lender each month, the loan balance generally increases over time as interest and fees accrue. You still keep ownership, but you must meet the ongoing requirements to stay in good standing.

A HECM is the most common reverse mortgage and is insured by the FHA, with specific rules including required counseling. There are also proprietary reverse mortgages offered by private lenders, which can have different guidelines, especially for higher value homes.

For a HECM reverse mortgage, the minimum age is typically 62. Some proprietary reverse mortgage programs may allow a lower minimum age depending on the lender, so the best move is to match the program to your exact scenario.

Depending on the program, you may be able to receive funds as a line of credit, monthly payments, a lump sum, or a combination. The best option depends on what you are trying to solve, steady monthly support, a reserve line for emergencies, or a one time payoff of an existing mortgage.

HECM borrowers must complete counseling with a HUD approved counselor and receive a counseling certificate before moving forward. Counseling is there to make sure you understand alternatives, responsibilities, and how the loan works so you are choosing it for the right reasons.

Reverse mortgages can include upfront costs and ongoing costs, and the loan balance can grow over time as interest and fees accrue, so total cost depends on how long you keep the loan. The right way to evaluate a reverse mortgage is not just “how much can I get,” but also “what does this do to my long term equity and monthly budget.”

Yes, you keep ownership, but you must keep the home as your primary residence and stay current on property taxes, homeowners insurance, and basic upkeep. A reverse mortgage is not a free house. It is a financial tool that works best when the responsibilities are clearly understood from day one.

A reverse mortgage generally becomes due when the last borrower sells the home, moves out, or is out of the home for an extended period such as long term medical care. This is one of the most important planning points, especially for families. We talk through realistic future scenarios before recommending a structure.

After the last borrower dies, the loan becomes due and heirs typically can repay the balance and keep the home or sell the home to repay the loan. If there is a spouse living in the home who is not a borrower, protections may apply in certain cases, but it depends on how the loan was set up and whether eligibility criteria are met.

In some cases a non borrowing spouse may be able to remain in the home after the borrower dies if specific requirements are met, so it is critical to structure the loan correctly upfront. This is a common place where good guidance matters. We review title, occupancy plans, and household details early so the loan matches the family plan, not just today’s need.