What Is a Reverse Mortgage?
A reverse mortgage lets a homeowner age 62 or older convert part of their home equity into cash, with no required monthly mortgage payment. The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration. You keep the title to your home and continue to live in it; the loan is repaid later, when you sell, move out permanently, or pass away.
How you can receive the money
- A lump sum at closing.
- Monthly payments to supplement your income, for a set term or for as long as you live in the home.
- A line of credit you draw from only as needed — often the most flexible and powerful option.
- Any combination of the above.
What you are still responsible for
A reverse mortgage removes the monthly mortgage payment, but you remain responsible for your property taxes, homeowners insurance, and basic maintenance, and you must keep the home as your primary residence. Meet those obligations and you cannot be forced to leave.
The required counseling
Before you can get a HECM, you must complete a session with an independent, HUD-approved counselor. This is a protection, not a hurdle — it exists to make sure you understand the loan and have considered alternatives. We encourage it.
The line-of-credit option has a feature many people miss: the unused portion can grow over time, giving you access to more money later. For the right planner, opening a reverse line of credit early — and leaving it untouched — is a quietly brilliant retirement strategy.