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Reverse Mortgage

Last updated: October 2026

For homeowners from age 55 on select programs (the minimum age is 60 or 62 in some states), or 62 for the FHA-insured HECM. Drop your monthly mortgage payment and use the equity you've built over a lifetime; you still pay taxes, insurance, and upkeep. First, I want you to understand exactly what you're trading for it.

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Do I qualify?

Key Facts

  • Reverse mortgages allow homeowners from age 55 on select programs (the minimum age is 60 or 62 in some states), or 62 for the FHA-insured HECM, to convert home equity into cash without monthly mortgage payments.
  • The most common type is the FHA-insured HECM, which requires independent HUD-approved counseling.
  • The loan is repaid when the last borrower sells, moves permanently, or passes away. You retain full homeownership and remain responsible for taxes, insurance, and upkeep.
  • Randy Mathis, NMLS# 1516760, explains HECM and proprietary options through Lumin Lending Inc.

What Is a Reverse Mortgage?

A reverse mortgage turns part of your home equity into cash without selling your home or making monthly mortgage payments (you still pay property taxes, insurance, and upkeep). Instead of you paying a lender, the lender pays you.

The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM). For high-value homes, Jumbo (proprietary) reverse mortgages are also available and often give access to more equity than the FHA program.

In the right situation, a reverse mortgage can wipe out your monthly mortgage payment, add income, or set up a growing line of credit for later; you still pay taxes, insurance, and upkeep. If you're not eligible yet or want to stay flexible, a HELOC is another way to use your equity. If you'd rather refinance into a lower rate, my conventional refinance options may be worth a look. I walk you and your family through the real numbers.

Key Benefits

No Monthly Mortgage Payment

No monthly mortgage payment is required; you still pay property taxes, insurance, and upkeep. The loan is repaid when you sell the home, move out, or pass away.

FHA and Jumbo Options

FHA-insured HECM (Home Equity Conversion Mortgage) loans are available to borrowers 62+ who meet HUD requirements. For high-value homes, Jumbo reverse mortgage programs can offer more equity access.

Supplement Retirement Income

Take funds as a lump sum, monthly payments, or a line of credit. Use the money for living expenses, healthcare, travel, or anything else you need.

Stay in Your Home

A reverse mortgage lets you age in place. You keep full ownership and can stay in your home as long as you keep up with property taxes, insurance, and upkeep.

How Does a Reverse Mortgage Work?

A traditional mortgage balance shrinks as you pay. A reverse mortgage runs the other way. The balance grows each month as interest and fees are added, and your equity shrinks by the same amount. No payment is required while you live in the home and meet the loan's obligations.

If you still have a mortgage, the reverse mortgage pays it off first. You can take the rest as a lump sum, steady monthly payments, a line of credit you draw when needed, or a combination. On a HECM, the unused part of a line of credit grows over time. That's why some retirees open one early as a standby reserve.

How much you can get depends mainly on the age of the youngest borrower or eligible non-borrowing spouse, your home's value, and current interest rates. HECM amounts are also capped by an FHA lending limit. That's where proprietary programs help higher-value homes.

Non-recourse is the protection that makes this work. When the home is sold to repay a HECM, neither you nor your heirs owe more than the home is worth, even if the balance has grown larger. FHA insurance covers the difference. Most proprietary programs are non-recourse too. I confirm that in the loan documents before you sign.

HECM vs. Proprietary (Jumbo) Reverse Mortgage

  • Backing

    FHA-insured HECM:
    Insured by FHA
    Proprietary (Jumbo):
    Private lender program

  • Best fit

    FHA-insured HECM:
    Most home values
    Proprietary (Jumbo):
    Higher-value homes above the FHA limit

  • Mortgage insurance

    FHA-insured HECM:
    FHA premium, upfront and ongoing
    Proprietary (Jumbo):
    No FHA insurance; priced by the lender

  • Line of credit growth

    FHA-insured HECM:
    Unused line grows over time
    Proprietary (Jumbo):
    Varies by program

  • Counseling

    FHA-insured HECM:
    HUD-approved counseling required
    Proprietary (Jumbo):
    Varies by program and state

  • Non-borrowing spouse

    FHA-insured HECM:
    Federal protections for an eligible spouse
    Proprietary (Jumbo):
    Set by each program

Who Is This For?

A reverse mortgage is for homeowners who want the equity they've built over decades to make retirement easier.

  • Homeowners who meet the program's age requirement who want to drop their monthly mortgage payment (taxes, insurance, and upkeep still apply) and free up cash flow
  • Retirees needing supplemental income for healthcare, living expenses, or other costs Social Security or a pension doesn't fully cover
  • Homeowners who want to age in place and use the equity they've built
  • Those with high-value homes who may get more equity access from Jumbo reverse mortgage programs
  • Retirees planning with an advisor who want a growing line of credit as part of a retirement plan

It's usually a poor fit if you expect to move within a few years. Same if leaving the home to your heirs without a loan matters most, or if taxes, insurance, and upkeep are already hard to cover.

How Do You Qualify, and What Do You Owe Along the Way?

To qualify, you need to meet the program's minimum age, live in the home as your primary residence, and have enough equity for the proceeds to cover any existing mortgage. The home must meet the program's property standards. Condos, for example, need approval for a HECM. HECM lenders also run a financial assessment of your credit history, income, and record of paying property charges.

No monthly mortgage payment does not mean no obligations. To keep the loan in good standing, you must:

  • Pay property taxes on time, every year
  • Keep homeowners insurance in force, plus flood insurance and HOA dues where they apply
  • Live in the home as your primary residence; an absence of more than 12 consecutive months for health reasons, such as a stay in a care facility, can make the loan due; moving out for other reasons makes it due as well
  • Maintain the property in reasonable condition

Falling behind on these is the most common way borrowers get into trouble.

What About Your Spouse and Your Heirs?

If both spouses qualify, putting both on the loan is the strongest protection. On a HECM, a younger spouse who can't be a borrower can be named as an eligible non-borrowing spouse. That spouse may remain in the home after the borrower passes away, as long as the loan's obligations stay current. They can't draw more funds. Proprietary programs set their own rules.

For your heirs, the loan becomes due after the last borrower passes away. They can repay it and keep the house, sell and keep whatever equity remains, or hand the home to the lender. On a HECM, and on most proprietary programs, they aren't personally on the hook for a shortfall.

What to Expect: Costs and the Process

Reverse mortgages cost more to set up than most loans. Expect an origination fee, third-party costs like the appraisal and title, and, on a HECM, FHA mortgage insurance both upfront and over the life of the loan. Most costs can be financed, which adds to the balance that accrues interest.

  1. Conversation. I go over your goals and your home, and whether a reverse mortgage, a HELOC, or downsizing makes the most sense.
  2. Counseling. For a HECM, you complete a session with an independent HUD-approved counselor.
  3. Application and appraisal. The lender orders an appraisal and runs the financial assessment.
  4. Closing. You review final figures and sign. On a primary residence you have a short federal right to cancel before funds are released.

What Are the Trade-Offs?

  • Your equity shrinks. The balance grows every month, so less is left for you or your heirs later.
  • Upfront costs are high. If you may move within a few years, those costs are hard to recover.
  • Obligations still apply. Taxes, insurance, occupancy, and upkeep remain your job.
  • Benefits planning matters. Proceeds you hold can affect needs-based programs such as Medicaid.

HUD-Approved Counseling Required

HECM reverse mortgages require independent counseling from a HUD-approved counselor before you can move forward. This protects you: counselors explain how the loan works, review alternatives, and confirm you understand your obligations (property taxes, insurance, maintenance). Counseling can be done by phone or in person and typically costs $125 to $200, though fee waivers are available for lower-income borrowers.

Find a counselor: HUD.gov counselor search or call HUD at 1-800-569-4287.

Frequently Asked Questions

How does a reverse mortgage work?
A reverse mortgage turns part of your home equity into cash with no monthly mortgage payments; you still pay property taxes, insurance, and upkeep. The lender pays you, as a lump sum, monthly payments, a line of credit, or a mix. Interest and fees are added to the balance each month, so the loan grows while your equity shrinks. It's repaid when you sell, move out, or pass away. Your heirs can then sell or refinance to keep the home.
What is the minimum age for a reverse mortgage?
Available from age 55 on select proprietary programs (the minimum age is 60 or 62 in some states); the FHA-insured HECM requires all borrowers to be 62 or older. If you're married, both spouses should ideally be on the loan. That protects the non-borrowing spouse if the primary borrower passes away or moves to a care facility. Age also affects how much you can get. Generally, the older the youngest borrower or eligible non-borrowing spouse, the more equity the program lets you access.
Do I still own my home with a reverse mortgage?
Yes, you keep full ownership of your home with a reverse mortgage. Your name stays on the title. You can stay in the home as long as you keep paying property taxes and homeowners insurance and keep the property in good condition. The lender holds a lien, just like a traditional mortgage lender, and any equity left after repayment belongs to you or your estate.
What types of reverse mortgages are available?
The most common is the HECM (Home Equity Conversion Mortgage). It's FHA-insured and available only through FHA-approved lenders. Proprietary (or jumbo) reverse mortgages are built for higher-value homes and can give you access to more equity. Single-purpose reverse mortgages are less common. Government agencies or nonprofits typically offer them for specific uses, like repairs or property taxes.
Can I lose my home with a reverse mortgage?
A reverse mortgage becomes due when the last borrower sells the home, passes away, or moves out of it as a primary residence. An absence of more than 12 consecutive months for health reasons, such as a stay in a care facility, makes the loan due. Moving out for other reasons makes it due as well. It can also become due, and the home can be lost to foreclosure, if property taxes, homeowners insurance, or upkeep fall behind. Staying current on those obligations keeps the loan in good standing.
Can I get a reverse mortgage if I still owe on my house?
Yes, as long as you have enough equity. The reverse mortgage pays off the existing mortgage first. Dropping that monthly payment is often the main reason people choose one. What's left after the payoff and closing costs comes to you as cash, monthly payments, or a line of credit. If your balance is too big next to your home value, the proceeds may not cover it. I'll show you that math first.
More questions (5)
Do I need good credit or income to qualify?
There's no single credit score cutoff on a HECM. Lenders do run a financial assessment of your credit history, income, and record of paying property taxes and insurance. If that raises concerns, the lender may set aside part of your proceeds to pay those charges. That's called a Life Expectancy Set-Aside. It reduces your cash but can make approval possible. Proprietary programs set their own standards.
Does a reverse mortgage affect Social Security or Medicare?
Reverse mortgage proceeds are loan advances, not earnings, so they generally don't affect Social Security or Medicare. Needs-based programs like Medicaid and Supplemental Security Income are different. Money you draw and keep past the month you receive it can count against their asset limits. If you rely on one, talk to a benefits counselor first. A line of credit drawn only as needed often avoids the problem.
Can I sell my house or pay off a reverse mortgage early?
Yes. You can sell the home any time, repay the balance from the sale, and keep the remaining equity. You can also make voluntary payments whenever you like to slow the balance's growth, and a HECM has no prepayment penalty. On a HECM line of credit, payments you make can increase the credit available to you later. Many families pay interest when cash is plentiful and let it accrue when it isn't.
What does a reverse mortgage cost?
Reverse mortgages cost more upfront than most loans. Expect an origination fee, third-party closing costs like the appraisal and title, and on a HECM, FHA mortgage insurance charged upfront and over the life of the loan. Most costs can be paid from the proceeds, so you bring little or no cash to closing. But financed costs add to the balance that accrues interest. I walk you through every line.
What happens at reverse mortgage counseling?
Before a HECM can move forward, you meet with an independent HUD-approved counselor, by phone or in person. The counselor explains how the loan works, your obligations for taxes, insurance, and upkeep, and alternatives such as selling or a home equity line. Counseling typically costs $125 to $200, and fee waivers are available for lower-income borrowers. The lender needs your completion certificate before your application proceeds.

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Talk it through

Book a call and I'll walk you and your family through how it works.

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Or call (949) 990-6030

Rates and program availability may vary based on the state or region in which the financed property is located. This is not a credit decision, an offer, or a commitment to lend. Program restrictions apply.

This page is educational and is not an offer to lend. Mathis Mortgage and Lumin Lending Inc. are not affiliated with, endorsed by, or acting on behalf of HUD, FHA, or any government agency. The borrower must meet loan obligations, including living in the home as a primary residence and paying property taxes, homeowners insurance, and maintenance, or the loan may become due.

Randy Mathis NMLS# 1516760 | DRE# 02236644 | Lumin Lending Inc. NMLS# 2716106 | DRE# 02291443. Equal Housing Opportunity.