How Can I Make My Mortgage Work For Me?
Reverse Mortgages Your Finacial Tool.
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What Is a Reverse Mortgage?
A Reverse Mortgage, officially known as a Home Equity Conversion Mortgage (HECM), is a federally insured loan program created to help senior homeowners access the equity they’ve built in their homes. Backed by the Federal Housing Administration (FHA) since 1988, it’s designed specifically for borrowers aged 62 and older.
According to the Federal Trade Commission, a reverse mortgage allows eligible homeowners to convert a portion of their home’s equity into cash!
Without selling the home
&
Without making monthly mortgage payments (as long as property taxes, homeowners insurance, and maintenance are kept up to date).
Unlike a traditional “forward” mortgage that requires immediate repayment, a reverse mortgage balance becomes due only when the final borrower permanently leaves the home.
Reverse Mortgage
vs
Traditional Mortgage
While both reverse and traditional mortgages help homeowners leverage the value of their property, the way they work — and who they’re designed for — differs dramatically.
A traditional mortgage requires the homeowner to make monthly payments over many years to gradually pay down the loan balance.
A reverse mortgage, on the other hand, allows eligible homeowners (age 62 and older) to access the equity they’ve already built — without making monthly mortgage payments. Instead, repayment occurs only when the borrower no longer lives in the home.
Key Similarities
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You retain full ownership and title to your home.
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You remain responsible for property taxes, homeowners insurance, and maintenance.
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Both loan types are secured by a note and deed of trust.
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Closing costs are generally comparable between reverse and traditional mortgages.
Key Differences
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No monthly mortgage payments: Reverse mortgage borrowers aren’t required to make ongoing payments (though taxes, insurance, and upkeep are still required).
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Growing line of credit: With a Home Equity Conversion Mortgage (HECM), the available credit can never be frozen or reduced — it’s guaranteed to grow over time, regardless of home value or loan balance.
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Non-recourse protection: Borrowers (or their heirs) will never owe more than the home’s value at the time it’s sold, thanks to FHA insurance.
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Eligibility: Applicants must be 62 years or older and occupy the property as their primary residence.
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Counseling requirement: Every reverse-mortgage applicant must complete FHA-approved counseling before the loan can close, ensuring full understanding of the program.
Can I Eliminate Monthly Mortgage Payments?
Yes! — a reverse mortgage allows you to eliminate mandatory monthly mortgage payments, as long as you stay current on property taxes, homeowners insurance, and home maintenance.
By removing that monthly obligation, you can free up valuable cash flow and redirect funds toward other priorities. If you currently have a mortgage, it will be paid off in full when you close your reverse mortgage. And if your home is already paid off, you can still qualify and use your equity to access additional funds.
One of the key advantages of a reverse mortgage is flexibility. Repayment isn’t required until the last borrower permanently leaves the home — and there are no prepayment penalties if you choose to pay the loan down sooner. You can make voluntary payments at any time, in any amount, giving you total control over how and when you manage your balance.
How Can I Use Reverse
Mortgage Funds?
The cash you receive from a reverse mortgage is yours to use however you wish. After paying off any existing mortgage balance, the remaining funds can be distributed in several ways to fit your financial goals:
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Lump-sum payment – one-time, tax-free cash disbursement.
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Steady monthly payments – a consistent, tax-free income stream.
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Line of credit – a flexible, growing safety net you can tap into anytime.
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Combination plan – mix and match payout methods to suit your needs.
Popular Ways Homeowners Use Reverse Mortgage Proceeds
Every homeowner’s situation is unique, but many use their reverse mortgage funds to improve financial comfort, security, and independence:
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Eliminate monthly mortgage payments and redirect savings toward daily expenses.
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Consolidate credit cards or other high-interest debts.
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Cover healthcare or long-term care costs, making it easier to age in place.
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Fund home renovations or accessibility upgrades for greater comfort.
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Supplement retirement income without triggering taxable withdrawals from IRAs or 401(k)s.
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Set aside an emergency line of credit for future needs.
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Support family — such as helping a child or grandchild with tuition or a home down payment.
A reverse mortgage is designed to make your home’s equity work for you — not the other way around.
Can My Children Keep the Home?
Yes! — your heirs can absolutely choose to keep the home after a reverse mortgage. When the time comes, they’ll have the option to repay the loan balance (typically through refinancing or other financing) and retain ownership of the property.
In most cases, however, the loan is repaid from the sale of the home after it passes to your heirs. If the home sells for less than the balance owed, neither you nor your heirs are responsible for the difference — because every Home Equity Conversion Mortgage (HECM) is protected by FHA insurance. This safeguard ensures that your family is never left with debt beyond the value of the home.
How Much Can I Receive from a Reverse Mortgage?
The amount of money you can access through a reverse mortgage depends on several factors — including your age, current interest rates, and your home’s appraised value. On average, eligible homeowners can access between 30% and 70% of their home’s equity as tax-free funds.
For personalized guidance or more detailed reverse mortgage information, contact our team of experts today — we’re here to help you understand your options and make the choice that fits your future best.