Reverse Mortgages

A reverse mortgage is a special home equity conversion mortgage (HECM) that is offered by HUD. It is only available to seniors age 62 and over, who own their home. It allows you to withdraw money based on the equity you’ve built up in your home over the years, which doesn’t have to be repaid until the home is sold, you move permanently, or you pass away. This allows you to get the most out of your biggest lifetime investment, which can be crucial at a time when seniors are at risk of losing benefits, support, and income.

If you’re considering applying for reverse mortgage, you’re sure to have a wide-range of questions and concerns about how this will affect your home, your finances, and your future. Call us at to speak with a HUD-certified housing counselor that can provide the information you need to help you decide if an HECM loan is right for you.

 

What are the requirements for a reverse mortgage?

There are two main requirements you need to meet for HUD to consider you eligible for their HECM program.

  1. You are at least 62 years old
  2. You own the property you want to use for the reverse mortgage and it is your primary residence—i.e. the home you where you live

There are no income requirements, so you can qualify for a reverse mortgage even on a limited fixed income. Certain eligibility requirements apply, both for you as the borrower and for your property. Your reverse mortgage counselor will confirm eligibility during counseling.

If you own more than one property, you can only take out a reverse mortgage on your primary residence. You do not have to own your property outright to take out a reverse mortgage — i.e. even if you have money left on your original mortgage and you may still be able to qualify for a reverse mortgage. As long as the balance owed on your mortgage isn’t more than what you’ll receive, you can use money you receive to pay off the balance owed.

 

What do I get from a reverse mortgage?

A reverse mortgage allows you to get money relative to how much equity you have in your home. Particularly if you’ve owned your residence for 15 years or more, there’s a good chance you have a fair amount of equity built up—even though property values have decreased so sharply since the real estate bubble burst!

You can take out the money in one lump-sum, as a line of credit, or in monthly installments. This allows you to pay bills that need to be paid, cover unforeseen expenses that often don’t work on a fixed income, and even supplement the money you receive every month. You can even use the money to purchase a new home, but you must be able to cover the difference between the HECM proceeds and the sale price plus closing costs of the new residence.

 

Do I still own my home?

Yes! Contrary to what you may have heard, you still own your home even after you take out a reverse mortgage. In fact, you are still responsible for maintenance, insurance, and even taxes on the property.

 

Do I have to use reverse mortgage counseling?

Yes. In order to qualify for a reverse mortgage, reverse mortgage counseling (also called HECM counseling) is required to assess your eligibility for the program and explain the implications of your reverse mortgage loan. Your certified counselor will also answer any questions you have and help you decide which payment option will work the best for your financial situation.

If you are thinking about taking out an HECM reverse mortgage loan, give us a call at to set up your appointment; appointments are usually scheduled within 48 hours of your call.