Senior Safe Real Estate

Reverse Mortgages 101: Understanding the Basics

What Is a Reverse Mortgage and Is It Right for You?

Many older adults have built significant wealth through homeownership but may live on limited retirement income. A reverse mortgage is an option that allows eligible homeowners to turn some of their home equity into cash while continuing to live in their homes.

What Is a Reverse Mortgage?

A reverse mortgage is a special type of loan for homeowners age 62 and older that allows them to access a portion of their home's equity without making required monthly mortgage payments. The loan is typically repaid when the homeowner sells the property, permanently moves out, or passes away.

Traditional Mortgage vs. Reverse Mortgage

Traditional Mortgage

• You pay the lender each month.
• The loan balance decreases over time.

Reverse Mortgage

• You receive funds from the lender.
• The loan balance grows over time.
• No required monthly mortgage payments.

Who Can Qualify?

You may qualify if you:

• Are 62 years of age or older
• Own your home or have substantial equity
• Live in the home as your primary residence
• Keep property taxes and homeowners insurance current
• Maintain the property in good condition

Types of Reverse Mortgages

Home Equity Conversion Mortgage (HECM)

The most common reverse mortgage available today.

• FHA-insured
• Federally regulated
• Includes important consumer protections

Proprietary Reverse Mortgage

• Offered through private lenders
• Often used for higher-value homes
• Not FHA-insured

Single-Purpose Reverse Mortgage

• Offered by some nonprofit organizations or local governments
• Designed for specific expenses such as home repairs or property taxes.

How Can I Receive My Funds?

You may be able to receive funds as:

• A lump sum
• Monthly payments
• A line of credit
• A combination of these options

Common Myths

Myth: The Bank Owns My Home

Fact: You remain the owner of your home and keep title to the property.

Myth: I Have to Move Out

Fact: You may continue living in your home as long as you meet the loan requirements.

Have questions about reverse mortgages? Contact one of our preferred lenders or other real estate-related professionalsto learn whether a reverse mortgage may fit your retirement goals