Turn home equity into cash, without a monthly payment
For homeowners 62 and older (and as young as 55 on some programs), a reverse mortgage converts part of your equity into cash while you stay in your home. It is a specialized product, so let’s talk it through.
What is a reverse mortgage?
A reverse mortgage lets qualified homeowners age 62 or older (and as young as 55 on some programs) turn part of their home’s equity into cash, without taking on a monthly mortgage payment. You keep living in and owning your home. The loan is repaid later, when the home is sold or is no longer your primary residence.
Reverse mortgage basics
- No required monthly mortgage payment, though you can make payments if you would like.
- You stay in your home and remain the owner.
- You keep paying property taxes, homeowners insurance, and upkeep (and HOA dues, if any). That is what keeps the loan in good standing.
- How much you can access depends mostly on your age and your home’s equity.
- The loan is typically repaid when the home is sold or is no longer your primary residence, and heirs generally have time to sell or refinance.
A reverse mortgage is not right for everyone, and the details matter. The best next step is a no-pressure conversation, where we will look at whether it fits and compare it against options like a HELOC or a refinance.
Reverse mortgage FAQs
Do I still own my home with a reverse mortgage?
Yes. You remain the owner and stay in your home. The lender holds a lien, like any mortgage, but you keep the title.
Do I have to make monthly payments?
No, a reverse mortgage has no required monthly mortgage payment. You do need to keep up with property taxes, homeowners insurance, and maintenance.
Can I lose my home?
As long as the home stays your primary residence and you keep up with property taxes, homeowners insurance, and upkeep, you continue to live there. Those ongoing obligations are the main things that keep the loan in good standing.
What happens to my heirs, and can I still leave the home to my kids?
Your heirs typically have time to sell the home or refinance to pay off the balance, and they keep any remaining equity. A reverse mortgage is non-recourse, which means you or your heirs never owe more than the home is worth when it is sold.
Do I need good credit or income to qualify?
Qualifying is based mostly on your age and your home’s equity, not a credit score. There is a financial assessment to confirm you can keep up with taxes and insurance, but it is not income-driven the way a regular mortgage is.
Is the money taxable?
Generally no. Reverse mortgage proceeds are loan advances, not income, so they are typically not taxable. Everyone’s situation is different, so check with a tax advisor.
How much can I get from a reverse mortgage?
It depends mostly on your age and how much equity you have. As a rule of thumb, the older you are and the more equity in the home, the more you can access. We can give you a ballpark and walk through your options.
Can I use a reverse mortgage to buy a home?
Yes. A program called HECM for Purchase lets qualified buyers purchase a new primary residence using a reverse mortgage, with no required monthly mortgage payment. It is a common move for downsizing or relocating in retirement.