Reverse Mortgages
A reverse mortgage lets an eligible homeowner borrow against home equity without a required monthly mortgage payment while the loan's requirements are met. You keep ownership, but taxes, insurance and upkeep continue, and the balance grows over time. It's worth comparing with other ways to use your equity.
Who may want to explore it
- You're a homeowner generally 62 or older (for a HECM) and the home is your principal residence
- You have meaningful equity and want income, a credit line, or to pay off an existing mortgage
- You want to buy a home that better fits this stage of life, with a sizable amount of your own funds
- A family member is helping you look into options (you're welcome to join the call together)
How borrowing against equity works here
Instead of you paying the lender each month, interest, mortgage insurance (for a HECM) and fees are added to the loan balance. The balance generally becomes due when the last borrower sells, moves out for good, passes away, or doesn't meet the loan's obligations. Because the balance grows, the equity left over for you or your heirs shrinks over time.
Three kinds I can help with
HECM
The Home Equity Conversion Mortgage is insured by FHA. Borrowers generally must be 62 or older, live in the home as their principal residence, have enough equity, complete independent HUD-approved counseling, and pass a financial assessment. Proceeds can come as a lump sum, monthly payments, a line of credit or a mix, depending on the option chosen.
HECM for Purchase
Buy a new principal residence using a HECM together with your own funds. It is not a zero-down purchase: the gap between the loan amount and the price plus closing costs must come from acceptable funds, such as the sale of your current home. HECM obligations and counseling still apply.
Proprietary (jumbo) reverse
Private reverse mortgages outside the FHA program. They may suit higher-value homes or situations a HECM doesn't cover, but age, available states, proceeds, fees and protections vary by provider and are not FHA-insured. I compare them side by side with a current HECM illustration.
What you still pay and do
- Property taxes, homeowners insurance and any HOA or other property charges
- Upkeep and repairs so the home stays in good condition
- Living in the home as your principal residence
Not meeting these can make the loan due and put the home at risk. “No monthly mortgage payment” never means no housing costs.
Costs and repayment
Expect closing costs, lender fees and, for a HECM, upfront and ongoing FHA mortgage insurance. Many of these can be financed, which adds to the balance. When the loan becomes due, it's usually repaid from a sale of the home or by heirs paying it off or refinancing. For a HECM, the amount owed generally can't exceed the home's value when it's sold; private products have their own terms.
Compare the ways to use your equity
A HECM line of credit is not a HELOC. They work differently, so compare them on what matters to you.
Reverse mortgage (HECM)
- Monthly payments
- No required mortgage payment while you meet the loan's terms; taxes, insurance and upkeep continue
- Main costs
- Closing costs, FHA mortgage insurance, interest added to the balance
- How you get the money
- Lump sum, monthly payments, line of credit or a mix
- Your current mortgage
- Must be paid off at closing, often with the reverse loan's proceeds
- Worth a look if
- You plan to stay in the home and want to reduce required payments
HELOC
- Monthly payments
- Monthly payments start right away and can rise with the rate or in the repayment phase
- Main costs
- Usually a variable rate, plus any lender fees
- How you get the money
- Draw what you need, when you need it, up to a limit
- Your current mortgage
- Stays in place; the HELOC is an added lien
- Worth a look if
- You can handle a new payment and want flexible access
Home-equity loan
- Monthly payments
- Fixed schedule of monthly payments
- Main costs
- Often a fixed rate, plus closing costs
- How you get the money
- One lump sum
- Your current mortgage
- Stays in place; this is a second lien
- Worth a look if
- You need a set amount for a defined project
Cash-out refinance
- Monthly payments
- One new monthly payment on a larger loan
- Main costs
- Closing costs and a new rate on the whole balance
- How you get the money
- Cash at closing after paying off the old loan
- Your current mortgage
- Replaced by the new loan
- Worth a look if
- The new loan's terms work for your whole balance
The process, step by step
- ConsultationWe talk through your goals, the home and your alternatives. Family is welcome.
- Independent counselingA HECM requires a session with a HUD-approved counselor who doesn't work for the lender. My consultation doesn't replace it.
- Application and reviewThe lender reviews the property, your finances (the financial assessment) and the title.
- ClosingYou sign, any existing mortgage is paid off, and proceeds are set up the way you chose.
Reverse mortgage questions
How is a reverse mortgage different from a HELOC?
A HELOC requires monthly payments from the start and is based on your income and credit like a regular loan. A HECM generally has no required monthly mortgage payment while you meet its terms, and its balance grows instead. Eligibility, costs and when each must be repaid are different.
What expenses do I still pay?
Property taxes, homeowners insurance, HOA or other property charges, and upkeep. Falling behind on these can make the loan due.
Do I keep ownership of my home?
Yes. With a HECM you keep the title; the lender has a mortgage on the home, as with any home loan. You must keep meeting the loan's obligations.
What happens if I move or my family inherits the home?
Moving out for good generally makes the loan due. Heirs can usually sell the home or pay off or refinance the balance within set timelines. A co-borrower or eligible non-borrowing spouse may have protections under HECM rules, but the conditions are specific, so ask the servicer or counselor to review your situation.
How much could I receive?
It depends on the youngest borrower's age, current interest rates, the home's value, program limits and any mortgage you have now. I don't estimate it from a rule of thumb; I get you a real illustration from the lender.
Could it affect my taxes or benefits?
It can depend on your situation and the benefit program. Please check with a tax or benefits professional before deciding.
Go deeper
You work with me, start to finish.
Marcus Wright · Loan Officer, NMLS #2789841
Originates through Q Mortgage LLC, NMLS #2567464. Licensed in Texas.
Check my license on NMLS Consumer Access
I aim to get back to you within a few working hours, often sooner.
Se habla español. Every page and form here works in Spanish.
How it works
- 1. Tell me your goalCall, book a time or send a note. No SSN and no credit check to start a conversation.
- 2. I compare your optionsI look at your income, property and plans, and explain the costs and tradeoffs of each route in plain language.
- 3. Apply when you're readyYou apply through a secure application. The lender's underwriting makes the final decision, and I keep you updated until closing.
Let's talk about your loan.
Call, book a time, or send a quick note. Whatever's easiest.
Hours Weekdays 8 a.m.–8 p.m. Central. Weekends 11 a.m.–7 p.m. Central by appointment.
I aim to get back to you within a few working hours, often sooner.
Your message didn't go through. Please call or email Marcus directly: (682) 403-3406 · marcus@qmortgage.ai