Reverse Mortgage — Home Equity for Seniors

For many homeowners, the house is the biggest asset they have, and retirement income does not always keep pace with the cost of living. A reverse mortgage is designed for exactly this situation: it allows homeowners age 62 and older to convert a portion of their home's equity into accessible funds, without taking on a monthly mortgage payment. Christopher Hovenier helps homeowners in Arizona, California, Colorado, Florida, Idaho, Michigan, New Mexico, Tennessee, Texas and Virginia understand how a reverse mortgage works, what it costs, and whether it truly fits their plans.

The most common reverse mortgage program is the HECM, or Home Equity Conversion Mortgage, which is insured by the FHA and regulated to protect borrowers. With a reverse mortgage, you continue to own and hold title to your home — the loan simply uses your equity as collateral, and unlike a traditional mortgage, there's no required monthly principal and interest payment as long as you meet the loan's ongoing obligations.

Those ongoing obligations matter: you remain responsible for property taxes, homeowners insurance, and basic home maintenance. As long as those are kept current, the loan stays in good standing. Repayment isn't due on a monthly basis — instead, the loan becomes due when the last surviving borrower sells the home, permanently moves out, or passes away, at which point the home is typically sold to satisfy the loan balance, with any remaining equity passing to the borrower or their heirs.

Depending on the specific program, funds can be received as a lump sum, a line of credit that grows over time, fixed monthly payments, or some combination of these — giving retirees real flexibility to structure the funds around their actual needs. Christopher walks every reverse mortgage borrower through the mandatory counseling process and the full mechanics of the loan before moving forward, so there are no surprises for you or your family.

Who It's Best For

• Homeowners age 62 or older with substantial home equity
• Retirees looking to supplement fixed income
• Homeowners who want to stay in their home long-term
• Borrowers who want to eliminate an existing monthly mortgage payment
• Homeowners planning with family on long-term retirement income

Requirements

• Youngest borrower must be at least 62 years old
• Home must be the borrower's primary residence
• Sufficient home equity to support the loan
• Completion of HUD-approved reverse mortgage counseling
• Ability to maintain property taxes, insurance, and upkeep

Benefits

• No required monthly mortgage payment
• Retain full ownership and title to your home
• Multiple ways to receive funds based on your needs
• FHA-insured HECM program with regulated consumer protections
• Funds are generally tax-free (consult a tax advisor for your situation)

Costs and Trade-Offs to Understand

A reverse mortgage can be a helpful tool, but it is a real loan with real costs. Go in with your eyes open:

• Interest is added to the balance. Because you are not making monthly payments, the amount you owe generally grows over time and your equity shrinks.
• There are upfront and ongoing costs. These can include an origination fee, closing costs, servicing charges, and FHA mortgage insurance premiums on a HECM.
• It can reduce what you leave behind. Less equity remaining means less for your heirs.
• Your benefits may be affected. Funds can interact with needs-based benefits, so talk with a benefits or tax advisor first.

Your Ongoing Obligations

Not having a monthly mortgage payment does not mean having no obligations. You must continue to live in the home as your primary residence, keep property taxes and homeowners insurance current, and maintain the property. Failing to do so can cause the loan to become due. Christopher will go through these obligations with you up front, and HUD-approved counseling, which is required, will cover them again.

Protecting a Spouse and Your Heirs

• A spouse on the loan can generally stay in the home as long as the loan obligations are met.
• A spouse not on the loan may have protections under HUD rules if certain conditions are met, so who is listed on the loan matters. Raise this early.
• Heirs can typically keep the home by repaying the loan, or the home's appraised value if that is lower, or they can sell it and keep any remaining equity. A federally insured HECM is non-recourse, meaning neither you nor your heirs owe more than the home is worth when it is sold, as long as the loan terms were met.

How Homeowners Use Reverse Mortgage Funds

• Paying off an existing mortgage to eliminate the monthly payment. Proceeds go to the existing mortgage first.
• Supplementing retirement income with a line of credit or monthly payments.
• Covering medical or in-home care costs and planning ahead for future needs.
• Making home modifications so you can stay in the home comfortably.
• Paying off high-interest debt. Read our guide to using home equity for debt payoff before deciding.

How a Reverse Mortgage Compares With Other Options

A HELOC, a home equity loan and a cash-out refinance all require a monthly payment. If you have the income to comfortably make that payment, one of them may cost less over time than a reverse mortgage, since the balance does not grow while you pay it down. A reverse mortgage tends to make the most sense when the monthly payment is the problem. Our home equity comparison guide lays the options side by side.

Where We Help

Christopher helps homeowners age 62 and older in Arizona, California, Colorado, Florida, Idaho, Michigan, New Mexico, Tennessee, Texas, and Virginia. Availability, loan amounts and terms vary by state and property, so call to confirm what applies to your home. Reverse mortgages are not available everywhere on every home type.

Frequently Asked Questions