A reverse mortgage lets homeowners 62+ turn part of their home equity into cash with no required monthly mortgage payment. You keep ownership, must live in the home and keep paying taxes and insurance, and the loan is repaid when you sell, move out or pass away.
What is a reverse mortgage?
A reverse mortgage is a loan for homeowners 62 and older that converts part of your home equity into cash. Unlike a traditional mortgage, there's no required monthly principal and interest payment. The balance grows over time and is repaid when the last borrower sells the home, moves out permanently or passes away.
HECM vs. proprietary reverse mortgages
- HECM (Home Equity Conversion Mortgage): insured by FHA and the most common type. The amount you can access is based on your age, interest rates and your home's value up to FHA's annual limit.
- Proprietary ("jumbo") reverse mortgages: offered by private lenders, often for higher-value homes that exceed the FHA limit.
Who qualifies?
- At least one borrower is 62 or older
- The home is your primary residence
- You have significant equity (an existing mortgage can be paid off with the proceeds)
- The property type is eligible — single-family homes, 2–4 unit homes you live in, FHA-approved condos and some manufactured homes
- You complete counseling with a HUD-approved counselor
- You can show the ability to keep paying property taxes, insurance and upkeep
How can I receive the money?
- Lump sum at closing
- Monthly payments for as long as you live in the home, or for a set term
- A line of credit — with a HECM, the unused portion grows over time
- A combination of the above
What does a reverse mortgage cost?
HECM costs typically include FHA mortgage insurance (an upfront premium and an annual premium), an origination fee that HUD caps, third-party closing costs such as appraisal and title, and interest that accrues on the balance. Most costs can be financed into the loan. Kenny will give you a written estimate so you can compare options clearly.
Why counseling is required
Before applying for a HECM you'll meet with an independent, HUD-approved counselor. They'll explain how the loan works, its costs and alternatives. It's a valuable safeguard, and family members are welcome to attend.
Common myths
- "The bank owns my home." False — you keep title and ownership.
- "My kids will inherit debt." With a HECM, heirs never owe more than the home is worth when it's sold.
- "I can't have an existing mortgage." You can — it's paid off with the reverse mortgage proceeds.
- "It's only for people in financial trouble." Many homeowners use reverse mortgages as part of a planned retirement strategy.
Is a reverse mortgage right for you?
It can be a great fit if you plan to stay in your home long-term and want more monthly cash flow or a financial cushion. It may not be the best fit if you plan to move soon or want to leave the home free and clear to heirs. Kenny will lay out the pros and cons for your situation — no pressure.
Have a question about your situation?
Kenny offers free, no-pressure consultations — call, text or start online.
Reverse mortgage borrowers must live in the home as their primary residence, continue to pay property taxes, homeowners insurance and HOA dues, and maintain the home. The loan becomes due when the last borrower no longer lives in the home. These materials are not from, nor approved by, HUD, FHA or any government agency. This article is general information, not financial, tax or legal advice.