learn more about a
Reverse Mortgage (HECM)
A reverse mortgage, formally called a Home Equity Conversion Mortgage (HECM), is a federally insured loan option created for homeowners age 62 and older. Backed by the FHA, this program allows eligible borrowers to access a portion of their home’s equity as cash, all while continuing to live in their home. With this type of loan, you’re not required to sell your property or make traditional monthly mortgage payments. Instead, homeowners simply remain responsible for ongoing obligations such as property taxes, insurance, and maintaining the home.
Reverse Mortgages vs. Traditional Mortgages
Reverse mortgages and traditional home loans both use your home as collateral, but they function in very different ways. With a traditional mortgage, borrowers make monthly payments over time to reduce their loan balance. A reverse mortgage, on the other hand, allows eligible homeowners to access a portion of their home’s equity without being required to make monthly mortgage payments.
What They Have in Common:
- Homeowners keep full ownership and title to their property.
- The borrower remains responsible for property taxes, homeowners insurance, and general upkeep of the home.
- Both loan types are secured by legal documents tied to the property.
- Closing costs are comparable to those of a standard “forward” mortgage.
Key Differences:
- Reverse mortgages do not require monthly principal and interest payments.
- A Home Equity Conversion Mortgage (HECM) credit line grows over time and cannot be reduced, even if the loan balance increases or the home’s value changes.
- These loans are non-recourse, meaning borrowers or their heirs will never owe more than the home’s value at the time it is sold. An FHA insurance premium helps provide this protection.
- Applicants must be at least 62 years old to qualify for a reverse mortgage.
Reverse Mortgage Steps
You remain the owner and continue living in your home.
You access a portion of your equity as cash, a line of credit, or monthly payments.
The funds are tax-free and can be used for any purpose.
You must continue to pay property taxes, homeowner’s insurance, and maintain the home.
When the home is sold or you permanently move, the loan is repaid, any remaining equity belongs to you or your heirs.
who qualifies for a
Reverse Mortgage
- Be at least 62 years old (or 55+ for select Proprietary Reverse programs).
- Live in the home as their primary residence.
- Have sufficient equity — typically at least 40–60% of the home’s value.
- Stay current on property taxes, homeowner’s insurance, and basic upkeep.
- Complete a brief, independent counseling session to ensure full understanding of the loan’s terms.
