A reverse mortgage lets homeowners aged 62 and older convert part of their home equity into cash without a monthly mortgage payment. Most are Home Equity Conversion Mortgages (HECMs), insured by the Federal Housing Administration.
It is a real mortgage with real obligations. It is also widely misunderstood, in both directions. Some people dismiss it based on how these loans worked decades ago. Others expect it to solve problems it cannot. The goal of this page is to give you the actual mechanics so you can decide whether it is worth a conversation.
How it works: you borrow against your equity. Instead of making monthly payments to a lender, the loan balance grows over time as interest and fees accrue. The loan becomes due when the last borrower sells the home, moves out permanently, or passes away. You can typically receive funds as a lump sum, a line of credit, monthly payments, or a combination. You keep the title to your home. You remain the owner.
What you must keep doing: a reverse mortgage does not end your obligations as a homeowner. You are still responsible for property taxes, homeowners insurance, HOA dues if applicable, maintaining the home in reasonable condition, and living in the home as your primary residence. Falling behind on these can cause the loan to become due. This is the single most important thing to understand before proceeding, and it is where most reverse mortgage problems originate.
