Reverse Mortgages

Is a reverse mortgage right for you?

A reverse mortgage lets homeowners 62 and older borrow against their home equity without making monthly mortgage payments. The loan balance grows over time and is typically repaid when the last borrower sells the home, moves out permanently, or passes away. The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM). Proprietary (jumbo) reverse mortgages are also available for higher-value homes.

Who it's best for

• Homeowners 62 and older with significant equity who plan to stay in the home.
• Retirees who want to supplement income, cover expenses, or pay off an existing mortgage to remove that monthly payment.
• Buyers 62+ using a HECM for Purchase to buy a new home with a larger down payment and no monthly mortgage payment.

How you can receive funds

• Lump sum at closing.
• Monthly payments for a set term or for as long as you live in the home.
• Line of credit you draw from as needed.
• A combination of the above, depending on the program.

Requirements

• Age: at least one borrower 62 or older (HECM).
• Home: your primary residence, with enough equity.
• Counseling: a session with a HUD-approved counselor is required before applying for a HECM.
• Ongoing obligations: you must keep paying property taxes, homeowners insurance, and any HOA dues, and keep the home in good repair.

Things to consider

Interest and fees are added to the balance, so the amount you owe grows and your equity shrinks over time, which can leave less for your heirs. Upfront costs, including FHA mortgage insurance on a HECM, can be higher than a traditional loan. Not keeping up with taxes, insurance, or upkeep can cause the loan to become due. Reverse mortgage funds may affect eligibility for some need-based benefits, and you should talk with a tax or financial advisor about your situation. We encourage involving family in the conversation.