✅ What Is a Reverse Mortgage?

A reverse mortgage is a home loan that allows homeowners 62 years or older to convert a portion of their home equity into tax-free cash, without selling the home or making monthly mortgage payments. The most common type is a Home Equity Conversion Mortgage (HECM), which is insured by the FHA.

🔄 How Does a Reverse Mortgage Work?

• You continue to own and live in your home
• You receive cash as a lump sum, monthly payments, a line of credit, or a combination
• You don’t make monthly payments—the loan is repaid when you sell, move out, or pass away
• Your heirs can keep the home by repaying the loan balance

💰 How Can I Use the Money?

You can use the funds however you like, including:

• Covering medical bills or in-home care
• Supplementing Social Security or retirement income
• Paying off existing debt or mortgages
• Funding home repairs or renovations
• Creating a financial safety net with a growing line of credit
• Simply improving your lifestyle in retirement

🛡️ Do I Still Own My Home?

Yes! You remain on the title and retain full ownership. As long as you meet the loan requirements (like paying taxes and insurance and maintaining the home), the bank does not own your home.

🧾 What Are the Requirements for a Reverse Mortgage?

To qualify for a HECM reverse mortgage, you must:

• Be 62 years or older
• Live in the home as your primary residence
• Have significant equity in the home
• Keep current on:
  • Property taxes
  • Homeowners insurance
  • HOA dues (if applicable)
  • Home maintenance
• Complete HUD-approved counseling

🧠 What Are Common Myths About Reverse Mortgages?

Let’s clear up some misconceptions:

• ❌ Myth: The bank takes your home
  ✅ Fact: You stay on the title and retain ownership
• ❌ Myth: You can’t leave your home to heirs
  ✅ Fact: Heirs can repay the loan and keep or sell the home
• ❌ Myth: You can only use the money for certain things
  ✅ Fact: There are no restrictions on how you spend the funds
• ❌ Myth: You need excellent credit
  ✅ Fact: Qualification is based more on age and equity, not credit score

🔎 What’s the Difference Between a Reverse Mortgage and a HELOC?

Feature	Reverse Mortgage (HECM)	HELOC (Home Equity Line of Credit)
Age Requirement	62+	None
Monthly Payments Required	No	Yes
Loan Term	No set term	Fixed term
Line of Credit Growth	Yes	No
Can Be Frozen by Lender	No	Yes
Income/Credit Heavy	Less so	More so

📉 Will It Affect My Taxes or Benefits?

• Reverse mortgage funds are tax-free because they are considered loan proceeds, not income
• Does not affect Medicare or Social Security
• May affect needs-based programs like Medicaid or SSI—speak with a benefits advisor

📈 What Happens to the Loan When I Pass Away?

When the borrower (or last borrower, if married) passes away:

• The loan becomes due and payable
• Heirs can:
  • Repay the loan and keep the home
  • Sell the home and use the proceeds to pay off the loan (they keep any remaining equity)
  • Walk away—because it’s a non-recourse loan, the estate is never responsible for more than the home’s value

🧮 How Much Money Can I Get?

That depends on several factors:

• Your age
• Home value
• Current interest rates
• Remaining mortgage balance (if any)

Older borrowers typically qualify for a higher percentage of their equity.

🔧 What Are the Costs?

Typical costs may include:

• FHA Mortgage Insurance Premium (MIP)
• Origination fee
• Appraisal and closing costs
• Most fees can be financed into the loan

🏡 Can I Use a Reverse Mortgage to Buy a New Home?

Yes! With a Reverse for Purchase (HECM for Purchase), you can:

• Sell your current home
• Use the proceeds plus the reverse mortgage to buy a new one
• Move to a better location, or age-friendly home
• All without taking on monthly mortgage payments

📞 Have More Questions?

Reverse mortgages can be a great solution for many homeowners—but they’re not one-size-fits-all. Let’s talk about your goals and whether a reverse mortgage fits your retirement strategy.

👉 You can contact me anytime for more info or to discuss whether a reverse mortgage may make sense for you.