A clear look at reverse mortgages
A reverse mortgage is a loan against home equity, not free money. Review the costs, ongoing responsibilities, and effect on your remaining equity before deciding.
Start with the HECM basics
A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage for eligible homeowners age 62 or older. Age alone does not establish eligibility. Ask about the property, existing mortgage, financial assessment, and other requirements.
Eric serves borrowers in Arizona and California. Bring your goals and questions about remaining in your home so you can discuss whether a reverse mortgage deserves further consideration alongside other choices.
Understand what you still owe
You must meet occupancy requirements, maintain the property, and keep property taxes and insurance current. Failing to meet the loan’s obligations can put the home at risk.
Interest and fees add to the loan balance over time, reducing the equity that may remain. Ask when the loan becomes due, what happens if you move or die, and how the rules affect a spouse or heirs. Discuss your household’s circumstances rather than relying on a general promise about staying in the home.
Review costs and counseling
HECM borrowers must receive counseling from a HUD-approved reverse mortgage counseling agency. Use that independent conversation to review responsibilities, alternatives, and questions you still have.
Ask for an explanation of origination and closing costs, mortgage insurance, interest, and any servicing fees. Costs paid from the loan proceeds reduce the funds available to you. Ask how the balance could change over the years you expect to keep the loan.
Common questions
Does a reverse mortgage eliminate housing expenses?
No. You still need to budget for property taxes, insurance, maintenance, and other applicable property charges. Ask which obligations apply and what happens if you cannot meet them.
What should my family understand before I decide?
Ask how repayment would work after a move or death, which protections may apply to a spouse, and what choices heirs may have. Review the specific terms with the counselor and appropriate legal or financial advisers.
Keep comparing
Home equity: explore the related guide
Consumer resources
Prepare for reverse mortgage counseling: questions to ask
HUD: Home Equity Conversion Mortgages
Consumer Financial Protection Bureau: reverse mortgage costs and counseling
Educational information, not a loan offer or commitment to lend. Availability and eligibility depend on the lender, program, property, and borrower. Ask Eric about current requirements. Read the mortgage disclosures.
Put your questions on the table.
Talk with Eric about your plans, your timeline, and what you want to understand.