TURN YOUR HOME EQUITY INTO FINANCIAL FLEXIBILITY
Reverse Mortgages Designed to Help You Use Your Home Equity
A reverse mortgage may allow eligible homeowners age 62 or older to access a portion of their home equity without requiring monthly mortgage payments. Whether you’re looking to strengthen retirement cash flow, pay off an existing mortgage, or create greater financial flexibility, we’ll help you understand how a reverse mortgage works and whether it may fit your goals.
Start Your ApplicationREVERSE MORTGAGES EXPLAINED
Access Your Home Equity While Continuing to Live in Your Home
A reverse mortgage allows eligible homeowners to convert a portion of their home equity into loan proceeds while continuing to own and live in the home. The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration and is generally available to homeowners age 62 or older who meet program requirements.
Unlike a traditional mortgage, a reverse mortgage generally does not require monthly principal and interest payments. The loan balance becomes due when a maturity event occurs, such as when the last eligible borrower permanently leaves the home or sells it. Borrowers must continue to meet loan obligations, including paying property taxes and homeowners insurance and maintaining the home.
REVERSE MORTGAGE HIGHLIGHTS
✓ No required monthly principal and interest mortgage payments
✓ Homeowners retain ownership of the home
✓ Loan proceeds may be available through several payment options, depending on the program
✓ HECM borrowers must generally be age 62 or older and meet applicable eligibility requirements
✓ Proceeds can be used for a variety of purposes, subject to program requirements
Reverse mortgage borrowers must continue to meet the terms of the loan, including occupying the home as required, paying property taxes and homeowners insurance, and maintaining the property. HECM borrowers must also complete HUD-approved counseling before obtaining the loan. Eligibility, available proceeds, costs, and loan terms depend on the borrower, property, current interest rates, FHA requirements, and lender guidelines.
WHY CONSIDER A REVERSE MORTGAGE?
Turn the Equity You’ve Built Into Greater Financial Flexibility
For eligible homeowners, a reverse mortgage can provide another way to use the equity built over years of homeownership. Depending on your circumstances and the loan program, the proceeds may help supplement retirement income, pay off an existing mortgage, cover expenses, or provide additional financial flexibility while you continue living in your home.
No Required Monthly Mortgage Payments
Reverse mortgages generally do not require monthly principal and interest payments while the loan remains in good standing. Borrowers must continue to meet loan obligations, including paying property taxes and homeowners insurance and maintaining the home.
Access Your Home Equity
A reverse mortgage may allow eligible homeowners to convert a portion of their home equity into loan proceeds that can be used to support retirement goals, manage expenses, or create additional financial flexibility.
Stay in the Home You Love
You continue to own and live in your home while using a portion of the equity you’ve built, provided you meet the loan’s occupancy and other ongoing requirements.
Flexible Ways to Receive Proceeds
Depending on the reverse mortgage program and your eligibility, proceeds may be available as a lump sum, monthly advances, a line of credit, or a combination of available options.
REVERSE MORTGAGE OPTIONS
Flexible Ways to Access Your Home Equity
Reverse mortgage financing can be structured in different ways depending on the program, your eligibility, and your financial goals. Understanding the available options can help you determine how your home equity may fit into your retirement and long-term financial plans.
HECM for Purchase
A HECM for Purchase may allow eligible homeowners age 62 or older to purchase a new principal residence using reverse mortgage financing together with the required funds from an allowable source, subject to FHA requirements.
Traditional HECM
The FHA-insured Home Equity Conversion Mortgage (HECM) is the most common type of reverse mortgage and may allow eligible homeowners age 62 or older to access a portion of their home equity while continuing to live in the home, provided applicable loan obligations are met.
Proprietary Reverse Mortgages
Some lenders offer private reverse mortgage programs outside the FHA-insured HECM program. These programs may provide additional options for eligible homeowners, including those with higher-value properties or financing needs that may not fit traditional HECM guidelines. Availability, features, and terms vary by lender.
HECM Payment Options
Depending on the HECM structure and eligibility, available proceeds may be received through options such as a line of credit, monthly advances, a lump sum for certain loan structures, or a combination of permitted payment options.
YOUR REVERSE MORTGAGE ROADMAP
From Exploring Your Equity to Closing
A reverse mortgage includes several important steps designed to help you understand the loan, confirm eligibility, and evaluate whether it fits your financial goals. We’ll guide you through counseling, application, appraisal, underwriting, and closing so you know what to expect along the way.
STEP 1
Explore Your Goals & Eligibility
We’ll discuss your home, available equity, age, existing mortgage obligations, and financial goals to help determine which reverse mortgage options may be worth exploring.
STEP 2
Complete HUD-Approved Counseling
For an FHA-insured HECM, you’ll complete required counseling with an independent HUD-approved housing counseling agency before the loan can move forward.
STEP 3
Complete Your Application
After counseling, we’ll complete your reverse mortgage application and gather the required borrower, property, financial, and counseling documentation.
STEP 4
Appraisal & Financial Assessment
The lender reviews the property appraisal and evaluates applicable financial requirements, including your ability to meet ongoing property obligations such as property taxes, homeowners insurance, and home maintenance.
STEP 5
Underwriting & Final Approval
The lender reviews the complete loan file to confirm that the borrower, property, and loan meet the applicable reverse mortgage program and underwriting requirements.
STEP 6
Close & Access Your Proceeds
Once the loan is approved and closing requirements are satisfied, you’ll sign the final documents. Available proceeds are then provided according to your selected loan structure and applicable program requirements.
WHAT YOU’LL NEED
Preparing for Your Reverse Mortgage
Reverse mortgage qualification considers the borrower, the property, available equity, and the ability to meet ongoing homeownership obligations. Having the appropriate documents ready can help make the process easier to navigate from application through closing.
Identification & Age Verification
Government-issued identification and other personal information may be required to verify identity and confirm that applicable age requirements are met.
Property & Mortgage Information
Be prepared to provide details about your home, current mortgage balance, any other liens on the property, and other property-related obligations that may apply.
Income & Financial Information
Income and financial documentation may be reviewed as part of the lender’s financial assessment and applicable reverse mortgage program requirements.
Assets & Credit Information
Asset information and credit history may be reviewed to evaluate your overall financial profile and your ability to meet ongoing property obligations associated with the reverse mortgage.
Property Taxes & Insurance
Documentation related to property taxes, homeowners insurance, and other applicable property charges may be needed as part of the reverse mortgage review and approval process.
Counseling Certificate & Additional Documents
For an FHA-insured HECM, you’ll need documentation showing completion of the required HUD-approved counseling, along with any additional documents requested by the lender during the loan process.
READY TO EXPLORE YOUR HOME EQUITY OPTIONS?
Let’s See Whether a Reverse Mortgage Fits Your Retirement Goals
If you’re considering ways to use your home equity in retirement, I’ll help you understand how reverse mortgages work, review the available options, and explore whether this type of financing aligns with your home, finances, and long-term goals.
