Reverse Mortgage
Your Home Equity. Your Retirement. More Than One Option.
Reverse mortgage lending has changed significantly. Depending on your age, equity, current mortgage, property, goals, and available loan programs, there may be several ways to use home equity during retirement.
Stephanie can help you understand the differences between traditional reverse mortgage options and newer second-lien reverse mortgage products — and which, if any, may be worth exploring given your specific situation.
There is no single reverse mortgage product. Options include FHA-insured HECM reverse mortgages and proprietary reverse mortgage products, including second-lien reverse mortgage products. Each has different eligibility requirements, costs, age requirements, and guidelines.
Two Different Strategies
Traditional Reverse Mortgage (HECM)
The FHA-insured Home Equity Conversion Mortgage (HECM) is the most common reverse mortgage product. It is designed for eligible older homeowners and typically pays off any existing first mortgage at closing.
- FHA-insured through HUD
- Requires HUD-approved counseling
- Typically pays off existing first mortgage
- Minimum age requirements apply
- Loan limits and eligibility requirements apply
Reverse Mortgage Second (Second-Lien)
A newer proprietary product designed to sit behind an existing first mortgage. Certain second-lien reverse mortgage products may allow eligible older homeowners to access equity while keeping their current first mortgage in place.
- Proprietary (non-FHA) product
- May allow existing first mortgage to remain
- Certain products may not require monthly P&I payment on the second
- Age, equity, and eligibility requirements vary by product
- Not available in all states or for all properties
A Reverse Mortgage Does Not Eliminate Homeowner Responsibilities
Regardless of the reverse mortgage product, borrowers generally must continue to:
- Pay property taxes
- Maintain homeowners insurance
- Maintain the property in good condition
- Pay applicable HOA dues
- Meet occupancy requirements where applicable
- Comply with all loan terms
- Continue making payments on any existing first mortgage that remains on the property
Failure to meet these obligations may result in the loan becoming due and payable. Stephanie will explain all obligations clearly before you proceed.
Common Questions
What is a reverse mortgage?
A reverse mortgage is a home loan for eligible older homeowners that allows them to access a portion of their home equity. Unlike a traditional mortgage, a reverse mortgage does not require a monthly principal-and-interest payment, though borrowers remain responsible for property taxes, insurance, maintenance, and other loan obligations.
What is the difference between a traditional reverse mortgage and a reverse mortgage second?
A traditional reverse mortgage (such as an FHA HECM) typically pays off an existing first mortgage at closing. A second-lien reverse mortgage is a newer proprietary product designed to sit behind an existing first mortgage, potentially allowing eligible homeowners to access equity without refinancing their current first mortgage.
Do I still own my home with a reverse mortgage?
Yes. You retain title to your home. However, you must continue to pay property taxes, maintain homeowners insurance, keep the property in good condition, pay applicable HOA dues, meet occupancy requirements, and comply with all loan terms.
What happens when the home is sold or the borrower passes away?
The reverse mortgage becomes due and payable when the last borrower sells the home, moves out permanently, or passes away. Heirs may repay the loan and keep the home, or sell the home to satisfy the balance.
Does a reverse mortgage affect my heirs?
Heirs are not personally liable for the reverse mortgage balance beyond the value of the home. They may repay the loan to keep the property or allow the home to be sold to satisfy the debt.
Have Questions About Your Own Home?
Every homeowner's situation is different. Your age, equity, current mortgage, interest rate, property, financial goals, and available loan programs all matter. Stephanie can help you compare your options.
Reverse mortgage products vary. FHA HECM reverse mortgages are insured by the Federal Housing Administration and require HUD-approved counseling. Proprietary reverse mortgage products, including second-lien reverse mortgage products, are not FHA-insured. Terms, eligibility, age requirements, costs, counseling requirements, product availability, and guidelines vary by product and state. This page is for educational purposes only and does not constitute a loan commitment or guarantee of loan approval. NMLS Individual #1087365 · NMLS Company #1147207 · CA DRE #01265685