Reverse Mortgages

Reverse Mortgages

Reverse Mortgages

You Have Options to Cash-Out Your Home’s Equity

Whether you need money to make home improvement, pay off a current mortgage, supplement your retirement income, or pay for other expenses, many Americans over the age of 62 are finding out that a “reverse” mortgage can be a helpful tool. They allow you to convert part of the equity in your home into cash without having to sell your home.

With a “regular” mortgage, you have to make payments to the lender every month. But in a “reverse” mortgage, you receive money from the lender and generally don’t have to pay it back for as long as you live in your home. The loan must be repaid when you die, sell your home, refinance your existing “reverse” mortgage or no longer live there as your principal residence. Reverse mortgages can help homeowners who have equity stay in their homes and still meet their financial obligations. 

However, you must be at least 62years old and live in your home. The proceeds of a reverse mortgage are generally tax-free, and many reverse mortgages have no income restrictions.


Home Equity Conversion Mortgages

Reverse mortgages are increasing in popularity with seniors who have equity in their homes and want to supplement their income. The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender.


How the Program Works

There are many factors to consider before deciding whether a HECM is right for you. To aid in this process, you must meet with a HECM counselor to discuss program eligibility requirements, financial implications and alternatives to obtaining a HECM and repaying the loan. Counselors will also discuss provisions for the mortgage becoming due and payable. Upon the completion of HECM counseling, you should be able to make an independent, informed decision of whether this product will meet your specific needs. 

Borrower Requirements

You must:
  • Be 62 years of age or older
  • Own the property outright or paid-down a considerable amount
  • Occupy the property as your principal residence
  • Not be delinquent on any federal debt
  • Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.
  • Participate in a consumer information session given by a HUD- approved HECM counselor

About HUD's Reverse Mortgages:

The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program, which enables you to withdraw some of the equity in your home. The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements and more. You can receive additional free information about reverse mortgages by contacting one of our licensed mortgage professional. It is smart to know more about reverse mortgages, and decide if one is right for you!


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