Reverse Mortgages: Turn Home Equity Into Flexibility in Retirement
Reverse Mortgages: Turn Home Equity Into Flexibility in Retirement
WHAT IS A REVERSE MORTGAGE?
A reverse mortgage is a loan available to eligible homeowners (typically 62+) that allows you to convert part of your home equity into funds.
Instead of you paying the lender monthly, the lender advances funds to you — and the loan balance generally increases over time. Repayment usually occurs when:
- The borrower sells the home
- Permanently moves out
- Or passes away
This is a powerful tool when used correctly — and a bad tool when used blindly. We focus on clarity and responsible fit.
HOW REVERSE MORTGAGES WORK
You keep living in the home as your primary residence. You may receive funds as:
- Lump sum
- Monthly payments
- Line of credit
- Or a combination
You remain responsible for:
- Property taxes
- Homeowners insurance
- Home maintenance obligations
WHY HOMEOWNERS CONSIDER REVERSE MORTGAGES
Remove payment
Can dramatically reduce monthly burn rate by eliminating required mortgage payments.
Cash flow
Support lifestyle, healthcare needs, or cover predictable living expenses.
Asset preservation
Use home equity instead of selling investment portfolios during market downturns.
Financial buffer
A line of credit can act as a safety net that grows over time.
WHO THIS IS BEST FOR
Best fit if you:
- Plan to stay in the home long-term
- Want improved monthly cash flow
- Have significant equity
- Want to reduce payment pressure
Not ideal if you:
- Plan to move in a few years
- Have difficulty paying taxes/insurance
- Want to leave home completely debt-free
- Need a short-term "quick cash" fix
PROS & CONSIDERATIONS
Pros
- ✔ No required monthly mortgage payment
- ✔ Multiple payout options
- ✔ Improves monthly cash flow
- ✔ Strategic for retirement planning
Considerations
- ⚠ Loan balance grows over time
- ⚠ Fees and interest accumulate
- ⚠ Heirs must decide handling later
- ⚠ Must comply with taxes/insurance
If you’re 62+ and own your home, you may have options.
Discover how your home equity can support your retirement goals responsibly.
FAQ — REVERSE MORTGAGES
In most cases, yes — you keep title and remain the homeowner, as long as you meet ongoing obligations (primary residence, taxes, insurance, maintenance).
Typically, no required monthly mortgage payments — but you must pay property taxes, insurance, and maintain the home.
The loan becomes due. Your heirs usually have options: sell the home and pay off the balance, refinance/pay off the loan and keep the home, or other resolution depending on program rules.
Yes — but the reverse mortgage balance must be handled. Many families plan ahead: keeping the home may require paying off or refinancing the balance.
No. It’s best for homeowners who plan to stay long-term. If someone plans to move soon, costs often outweigh benefits.
Generally, yes — retirement expenses, healthcare, debt consolidation, home improvements, etc.
Reverse Mortgage Disclosures
A reverse mortgage is a loan available to homeowners 62 years of age or older that allows you to convert a portion of your home equity into cash. No monthly mortgage payments are required as long as the borrower lives in the home as their primary residence and meets all loan obligations.
The loan becomes due and payable when the home is sold, the borrower no longer occupies the property as a primary residence, required property charges are not paid, the property is not maintained, or the borrower (or last surviving borrower) passes away.
Interest, mortgage insurance premiums, and fees accrue over time and are added to the loan balance, which may increase and potentially exceed the home’s value. Reverse mortgages are non-recourse loans, meaning neither the borrower nor their heirs will owe more than the value of the home at the time of repayment.
Borrowers are responsible for paying property taxes, homeowners insurance, flood insurance (if required), and HOA dues, and for maintaining the property. Failure to meet these obligations may result in default or foreclosure.
HUD-approved counseling is required prior to closing. Reverse mortgage proceeds may affect eligibility for certain need-based government benefits.
This information is provided for general educational purposes only and does not constitute legal or financial advice. Loan terms, eligibility, and availability may vary.
Get clarity first — then decide.
See if a reverse mortgage fits your retirement plan.
