If you're 62 or older, a reverse mortgage may let you access your home's equity — with no monthly mortgage payments required.
A reverse mortgage (also called a Home Equity Conversion Mortgage, or HECM) is a government-backed loan that lets homeowners 62 and older convert part of their home equity into cash — without selling the home or making monthly mortgage payments.
You stay in your home. You keep the title. The loan is repaid when you sell, move out, or pass away.
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No. You retain the title and ownership of your home throughout the life of the loan, just as with a traditional mortgage.
Your heirs can choose to repay the loan and keep the home, or sell the home and use the proceeds to repay the loan. Any remaining equity goes to your estate.
Yes. Your heirs have options — they can repay the reverse mortgage balance and keep the home, or sell it. The FHA non-recourse feature means they'll never owe more than the home is worth.
Generally no. Reverse mortgage proceeds are considered loan advances, not income, so they are typically not subject to income tax. Consult your tax advisor for your specific situation.
The amount depends on your age, home value, current interest rates, and existing liens. The older you are and the more equity you have, the more you may be able to access.
Credit requirements are more flexible than traditional loans. Lenders primarily look at your ability to maintain the home, pay property taxes, and keep insurance current.
Reverse Mortgage Disclosure: These materials are not from HUD or FHA and were not approved by HUD or a government agency. This is not an offer to make a loan or to make a loan on any particular terms. All loan applications are subject to underwriting guidelines and approval. Not all applicants will qualify. Rates and terms are subject to change without notice. A reverse mortgage increases the principal mortgage loan amount and decreases home equity (it is a negative amortization loan). Borrower is still responsible for paying property taxes, homeowner's insurance, and home maintenance costs. Failure to do so may result in the loan becoming due and payable. At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds. Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees. The loan balance grows over time, and interest is charged on the outstanding balance. The borrower remains responsible for property taxes, hazard insurance, and home maintenance, and failure to pay these amounts may result in the loss of the home. Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. BorrowLA is a DBA of New Aim Funding, Licensed Mortgage Broker #821872.