🏡 What is a Reverse Mortgage?

A Reverse Mortgage is a special type of home loan available to homeowners age 62 or older. It allows them to convert part of the equity in their home into cash—without having to sell the home, give up ownership, or make monthly mortgage payments.

🔁 How Does It Work?

Instead of the borrower making monthly payments to a lender, the lender makes payments to the borrower. The loan is repaid when the borrower sells the home, moves out permanently, or passes away.

🎯 Who Qualifies?

• Homeowners age 62 or older
• Must live in the home as their primary residence
• Have significant equity in the home
• Must maintain the property, pay taxes, and homeowners insurance

💰 Types of Reverse Mortgages

• HECM (Home Equity Conversion Mortgage) – Federally insured and most common
• Proprietary Reverse Mortgages – Offered by private lenders, for higher-value homes
• Single-Purpose Reverse Mortgages – Offered by nonprofits/government for specific needs (e.g., repairs)

✅ Pros

• Provides income for retirees
• No monthly mortgage payments
• You keep the title to your home
• Funds can be used however you like (for HECM)

⚠️ Cons

• Reduces equity in the home
• Fees and closing costs can be high
• Loan must be repaid when the borrower moves, sells, or passes away
• Heirs may inherit less or need to repay the loan to keep the home