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A type of loan that allows senior homeowners to borrow against the equity in their homes. Also like a traditional mortgage, when you take out a reverse mortgage loan, the title to your home remains in your name. However, unlike a traditional mortgage, with a reverse mortgage loan, borrowers don’t make monthly mortgage payments. The borrower is still responsible for paying their property taxes and insurance and maintaining the home.

A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage program, regulated by the U.S. Department of Housing and Urban Development (HUD). Borrowers are responsible for paying the premiums of that insurance.  A HECM is the most common type of reverse mortgage and offers several safeguards for eligible homeowners. 

To qualify for a HECM reverse mortgage, you must be at least 62 years old, own your home outright or have a low mortgage balance, and live in the home as your primary residence. Your eligibility will also be determined by a financial assessment to ensure you can meet ongoing obligations like property taxes and insurance.

The amount of equity required for a reverse mortgage varies based on factors such as your age, the home’s appraised value, and current interest rates. Generally, the older you are and the higher your home’s value, the more equity you can access.

You can still get a reverse mortgage even if you have an existing mortgage on your home. The reverse mortgage must be used to pay off the existing mortgage, and any remaining funds can be used as you see fit.

The amount you can receive from a reverse mortgage depends on your age, home value, current interest rates, and the specific program you choose. Generally, the older you are and the more valuable your home, the more money you can access.

You can receive the funds from a reverse mortgage in various ways, including a lump sum, monthly payments, a line of credit, or a combination of these options. The choice depends on your financial goals and needs.

Yes, you can use a reverse mortgage to refinance an existing mortgage or other home-related debts. The reverse mortgage pays off these obligations, and you can access any remaining funds.

No, reverse mortgage proceeds are generally not considered taxable income. Consult with a tax advisor for your specific situation.

You can use the proceeds from a reverse mortgage for any purpose, such as covering living expenses, home improvements, medical bills, travel, or debt consolidation.

Yes, you can use a reverse mortgage for a Home Equity Conversion Mortgage for Purchase (HECM for Purchase) to buy a new home if you meet the age and occupancy requirements.

Interest rates for reverse mortgages can be either fixed or variable, depending on the product you choose. Fixed rates offer a one-time lump sum payment, while variable rates may provide more flexible payment options.

Yes, you can refinance a reverse mortgage to access more equity or to take advantage of better terms if your home’s value has increased.

Yes, like any mortgage, reverse mortgages come with closing costs and fees. These typically include origination fees, mortgage insurance, and appraisal costs.

When the loan becomes due, you or your heirs will need to repay the loan balance, including any accrued interest and fees. Typically, this is done by selling the home or using other assets.

The principal and interest charges of a reverse mortgage become due when you move out of the home, sell the home, or pass away. The loan will then be repaid from the home’s sale proceeds. The principal and interest will also be due if the borrower defaults on the loan terms.

If one co-borrower passes away or moves out of the home for health reasons, the loan will not become due as long as at least one borrower continues to live in the home as their primary residence.

Reverse mortgage counseling is a mandatory step in the application process. It involves meeting with a HUD-approved counselor who provides information and ensures that you fully understand the terms and implications of a reverse mortgage.