Reverse mortgages.
Convert home equity into tax-free funds without a monthly mortgage payment, while retaining ownership of your home. Available to homeowners age 62 and older. FHA-insured HECM and proprietary jumbo options.
What is a reverse mortgage?
A reverse mortgage is a loan that allows homeowners age 62 and older to convert a portion of their home equity into cash, without selling the home or making a monthly mortgage payment. The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM). Instead of you paying the lender, the lender provides funds to you — as a lump sum, a line of credit, monthly payments, or a combination — and the balance is repaid when the loan becomes due.
You remain on title. The lender does not own your home. You retain ownership for as long as the property is your primary residence and you stay current on the responsibilities below.
The Critical Caveat
The borrower remains responsible for property taxes, homeowner's insurance, and reasonable maintenance throughout the life of the loan. The loan becomes due when the last surviving borrower no longer occupies the home as a primary residence — whether by sale, permanent move-out (including to assisted living), or death.
HECM vs. proprietary jumbo — how to think about the choice.
FHA-insured Home Equity Conversion Mortgage
The most common reverse mortgage in the U.S. — federally insured by the FHA, with consumer protections built into law.
- Available to borrowers age 62 and older
- FHA lending limit caps the home value used in the calculation
- HUD-approved counseling required before application can move forward
- Non-recourse: neither borrower nor heirs ever owe more than the home is worth
- Multiple disbursement options: line of credit, monthly tenure, lump sum
Private (non-FHA) reverse mortgage
Offered by private lenders, not insured by the FHA. Designed for higher-value homes where the HECM cap leaves equity on the table.
- Often available starting at age 55 (varies by lender and product)
- Higher loan limits — useful when home value substantially exceeds the FHA cap
- No FHA mortgage insurance premium
- Structure, fees, and consumer protections vary by lender
- Counseling requirements and disbursement options vary by program
What a reverse mortgage isn’t.
Myth: You give up ownership
Title stays in your name. A reverse mortgage is a lien on the property — not a transfer of ownership — exactly like a traditional mortgage. You can sell, refinance, or leave the home to heirs, just like any other mortgaged property.
Myth: The bank ends up owning your home
The lender's interest is the loan balance, not the property. When the loan becomes due, the home is typically sold or the loan is refinanced. Any equity above the loan balance belongs to you or your heirs.
Myth: Heirs get nothing
Heirs typically have three options: sell the home and keep any equity above the balance, pay off the loan (often at 95% of appraised value or the balance, whichever is less) and keep the home, or sign the deed over to the lender. Because HECMs are non-recourse, heirs never owe more than the home is worth.
How much can you borrow?
The amount available is generally driven by three factors: the youngest borrower's age (older borrowers can access more), the home's appraised value (or the applicable lending limit, whichever is lower), and current interest rates. Most reverse mortgages also offer a line-of-credit option whose unused portion typically grows over time at the same rate the loan accrues — providing a flexible reserve for future medical, in-home care, or unexpected costs. A consultation produces a personalized estimate based on your actual numbers.
What happens when the loan becomes due
The reverse mortgage becomes due when the last surviving borrower no longer occupies the home as a primary residence — whether by sale, permanent move-out, or death. Heirs typically have three options:
- Sell the home and use the proceeds to repay the loan. Any remaining equity belongs to the heirs.
- Pay off the loan and keep the home. Heirs may pay 95% of the appraised value or the loan balance, whichever is less.
- Sign the deed over to the lender if the loan balance exceeds the home's value. No other personal assets are at risk — HECMs are non-recourse loans.
Costs & What to Expect
Setup costs vary by program and lender — they may include an FHA mortgage insurance premium (HECM only), origination fee, appraisal, title insurance, settlement fees, and recording charges. Many can be financed into the loan rather than paid out of pocket. HUD-approved counseling is required before any HECM application can move forward. The HECM is a non-recourse loan: borrowers and heirs never owe more than the home's value.
Tax Implications
Reverse mortgage proceeds are typically not taxable income because they're loan proceeds rather than earned income. Receiving funds may, however, affect needs-based government benefits in some cases. Always consult a qualified tax professional for guidance on your specific situation — Debbie does not provide tax advice.
*No monthly principal-and-interest payment is required, but borrowers remain responsible for property taxes, homeowner's insurance, and reasonable home maintenance throughout the life of the loan.
Three ways a reverse mortgage actually helps.
You keep ownership
Title stays in your name. The lender does not own your home. As long as the property remains your primary residence and you keep up with taxes, insurance, and maintenance, you can typically stay in the home for life.
The line of credit grows
If you choose the line-of-credit option, the unused portion typically grows over time at the same rate the loan accrues — providing a flexible reserve for future medical, in-home care, or unexpected costs.
FHA-insured protections
The HECM is federally insured by the FHA. That insurance backs the non-recourse promise — neither you nor your heirs will owe more than the home is worth — and funds your independent HUD-approved counseling session before closing.
Required counseling, by design — and it protects you.
Federal law requires every reverse mortgage borrower to complete a counseling session with a HUD-approved counseling agency before any application can move forward. The session typically takes 60 to 90 minutes by phone or in person.
The counselor — independent from any lender — walks you through how the loan works, the long-term implications for you and your heirs, alternatives you may want to consider, and the responsibilities you'll keep (property taxes, homeowner's insurance, and home maintenance). It's one of the strongest consumer protections in mortgage lending.
Find out if a reverse mortgage is right — in 10 questions.
An honest read on whether a reverse mortgage may fit your goals, age, and equity. No high-pressure sales, no application required.
Common reverse mortgage questions.
Do I lose ownership of my home with a reverse mortgage?
No. You retain title to your home throughout the life of the reverse mortgage. The lender does not own the property. As long as the home remains your primary residence and you continue to keep up with property taxes, homeowner's insurance, and reasonable maintenance, you can stay in your home for as long as you wish.
What happens to a reverse mortgage when the borrower passes away?
The loan typically becomes due when the last surviving borrower no longer occupies the home as a primary residence. Heirs generally have several options: sell the home and keep any equity above the loan balance, pay off the loan (often at 95% of appraised value or the loan balance, whichever is less) and keep the home, or sign the deed over to the lender. Reverse mortgages are non-recourse, so heirs and the estate do not owe more than the home is worth.
How much equity can I actually access?
The amount you can borrow generally depends on the youngest borrower's age, the home's appraised value (or the FHA lending limit, whichever is lower), and current interest rates. Older borrowers and lower rates typically allow access to more proceeds. For higher-value homes, proprietary jumbo reverse mortgages may extend the limit further. A consultation produces a personalized estimate based on your specific numbers.
What costs are involved in setting up a reverse mortgage?
Reverse mortgage closing costs may include an FHA mortgage insurance premium (for HECM loans), origination fee, appraisal, title insurance, settlement fees, and recording charges. Many of these costs can be financed into the loan so they don't have to be paid out of pocket. Costs are typically higher than a traditional mortgage, which is why a reverse mortgage often makes more sense for borrowers planning to stay in the home for the long term.
Can I use a reverse mortgage to buy a home (HECM for Purchase)?
Yes. The HECM for Purchase program allows borrowers age 62 and older to use a reverse mortgage to purchase a new primary residence — often a smaller, single-story, or more accessible home for retirement. You bring a down payment from cash, equity from a prior home sale, or other funds, and the reverse mortgage covers the rest. There is typically no required monthly mortgage payment, although you remain responsible for property taxes, insurance, and maintenance.
Is HUD-approved counseling really required, and how long does it take?
Yes. Federal law requires every reverse mortgage borrower to complete a counseling session with a HUD-approved counseling agency before closing. The session typically takes 60 to 90 minutes and may be completed by phone or in person. The counselor walks you through how the loan works, the long-term implications for you and your heirs, and any alternatives you may want to consider. Debbie can help you arrange counseling with an approved Florida agency.