What is a Reverse Mortgage?

A reverse mortgage or Home Equity Conversion Mortgage (HECM) may be a strategic financial option for homeowners ages 62 or older. It is a FHA-insured loan that allows you to access the equity in your home and convert it into cash. Unlike a traditional (forward) mortgage, it does not require monthly mortgage payments, but you can opt to pay interest only; principal and interest; or make no loan payment—you choose. This gives you more freedom in managing your monthly expenses.

Reverse Mortgage Requirements

  1. Age Requirements

    • You must be at least 62 years or older, own your home and be on title of the home (if there is more than one titleholder on the home, one must be at least 62 to qualify).
  2. Equity Requirements

    • Your property must have sufficient equity available in order to pay off any existing mortgages or liens using the reverse mortgage. Any remaining reverse mortgage proceeds can then be used as you wish. A good rule of thumb is that you generally should have at least 50% equity in the home in order to qualify. The more equity, the more money you can receive though the exact limit depends on your age.
  3. Property Requirements

    • Your home must be your primary residence – borrowers must live in the home and cannot live elsewhere for more than 12 consecutive months
    • The home must meet minimum property standards set by the U.S. Department of Housing and Urban Development (HUD). However, you can use your reverse mortgage proceeds to pay for certain required repairs in order to meet these standards. Since these requirements can be somewhat complex, it is best to speak to one of our reverse mortgage specialists.
  1. 4. Additional Requirements

    • You must be financially able to pay your property taxes, insurance, home maintenance and any applicable HOA fees.
    • You must complete a counseling session with a HUD-approved counseling agency – The purpose of this requirement is so you are aware of all of your options, and can evenly weigh the pros and cons of each.
    • You can’t have any outstanding federal tax liens and must have made your property tax payments for the last two years.

It couldn't be easier to learn more right now, with no pressure and of course no obligation.

Call toll-free to speak with a reverse mortgage expert (855) 493-0071

*Consult a financial advisor and appropriate government agencies for any effect on taxes or government benefits.