Reverse Mortgage (HECM)

The amount you can access depends on the youngest borrower's age, the home's value and current interest rates. You can receive funds as a line of credit, monthly payments, a lump sum or a combination. You stay on title and must keep paying property taxes, homeowners insurance and any HOA dues, and keep the home in good repair.

The loan becomes due. Your heirs can sell the home and keep any equity left after repaying the loan, refinance or pay it off to keep the home, or hand the home to the lender. A HECM is non-recourse, so heirs are not personally responsible for more than the home is worth. Under current HUD rules, heirs who want to keep the home can generally pay off the loan for the lesser of the balance or 95% of the appraised value. An eligible non-borrowing spouse may be able to stay in the home.

Under current HUD rules, at least one borrower must be 62 or older, the home must be your primary residence, you need significant equity, and you must complete counseling with a HUD-approved counselor. The lender also reviews your income and credit history to confirm you can keep paying taxes, insurance and upkeep.

Yes, if the loan terms are not met. The loan can become due if you stop paying property taxes or homeowners insurance, let the home fall into disrepair, or move out for more than the allowed time. Planning for those costs is part of the counseling and the lender's financial assessment.

A HELOC requires monthly payments and income to qualify, but costs less to set up. A HECM requires no monthly mortgage payment and its line of credit cannot be frozen or reduced while you meet the loan terms, but upfront costs are higher. The right choice depends on your age, income and how long you plan to stay. We can lay them side by side.