What Is a Reverse Mortgage?
A HECM (Home Equity Conversion Mortgage) reverse mortgage allows homeowners aged 62 and older to convert a portion of their home equity into cash — as a lump sum, monthly payments, a line of credit, or a combination. No monthly mortgage payments are required. The loan is repaid when the borrower sells, moves out, or passes away. It is insured by the Federal Housing Administration.
The amount you can access depends on your age, home value, and current interest rates. You retain ownership and must continue paying property taxes, insurance, and maintain the property.
The misunderstanding: You do not give your home to the bank. You retain title and ownership. The loan is repaid from sale proceeds when the home eventually sells. If it sells for more than the balance, the excess goes to you or your heirs. If less, FHA insurance covers the shortfall — your heirs owe nothing.
Who Reverse Mortgages Are For
- Homeowners 62+ who want to access equity without monthly payments
- Retirees supplementing income with home equity
- Seniors eliminating existing mortgage payments to reduce expenses
- Estate planning — using the line of credit as a financial safety net
Key Features
No monthly mortgage payments required. FHA-insured (non-recourse — you or heirs never owe more than the home is worth). Available as lump sum, monthly payments, line of credit, or combination. Must be primary residence. Mandatory HUD counseling required. Proprietary (jumbo) reverse mortgages available for higher-value homes.