Reverse Mortgage (HECM)

Homeowners 62+ looking to optimize retirement

Convert home equity into tax-free income for retirement. May allow you to eliminate your monthly mortgage payment while staying in your home. Property taxes, insurance, and maintenance remain your responsibility. A financial planning option for homeowners 62 and older.

Program Overview

How Reverse Mortgage (HECM) Loans Work

A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage available to homeowners aged 62 and older. It allows you to convert a portion of your home equity into tax-free funds while continuing to live in and own your home. You are not selling your home, and the bank does not take ownership.

The defining feature of a reverse mortgage is that there is no monthly mortgage payment required. Instead, the loan balance grows over time as interest accrues. The loan becomes due when the last borrower permanently leaves the home, sells, or passes away. At that point, the home is typically sold and the loan is repaid from the proceeds. Any remaining equity belongs to the homeowner or their heirs.

HECM proceeds can be taken as a lump sum, a monthly payment, a line of credit, or a combination of these. The line of credit option is notable because the unused portion grows over time at the same rate as the loan balance, which may provide a growing reserve of accessible funds, subject to program terms.

Reverse mortgages have evolved significantly and are now recognized as a legitimate financial planning tool by many certified financial planners. Common strategies include eliminating an existing mortgage payment to reduce monthly expenses, using the line of credit as a buffer during market downturns (as a potential buffer during periods of market volatility (consult a financial advisor)), and some borrowers use reverse mortgage funds to help cover expenses while delaying Social Security benefits (consult a financial advisor).

Key Features

  • No monthly mortgage payment required
  • Tax-free proceeds (lump sum, monthly payment, line of credit, or combination)
  • FHA-insured (HECM), protecting you and your heirs
  • You retain full ownership of your home
  • Non-recourse loan: you or your heirs will never owe more than the home is worth
  • Growing line of credit: unused funds increase in value over time
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The Process

How It Works

1

HUD Counseling Session

Federal law requires a counseling session with a HUD-approved counselor before you can apply. This session (about 60 to 90 minutes) covers how reverse mortgages work, the costs involved, and alternatives. It is designed to protect you.

2

Application and Financial Assessment

We process your application, which includes a financial assessment to confirm you can maintain property taxes, homeowners insurance, and home maintenance. An appraisal determines your home's value and the amount available to you.

3

Underwriting and Approval

Your file goes through FHA underwriting. Because there are no monthly payments to qualify for, the process focuses on property value, age, and your ability to maintain the home's ongoing obligations.

4

Close and Begin Receiving Funds

After closing, you select how you want to receive your funds. If you have an existing mortgage, it is paid off first from the HECM proceeds. Any remaining funds are yours to use as you choose.

Ideal Borrower

Who This Program Is For

Reverse mortgages are designed for homeowners aged 62 and older who have significant home equity and want to improve their retirement cash flow or financial flexibility.

Retirees who want to eliminate their existing monthly mortgage payment
Homeowners 62+ who want to access equity without selling their home
Retirees using the line of credit as a financial buffer during market downturns
Homeowners who want to delay Social Security benefits to maximize lifetime income
Couples planning for a surviving spouse's financial security
Seniors with a paid-off home who want to supplement retirement income

Run the Numbers

Use our calculator to explore payment scenarios, compare options, and see how a reverse mortgage (hecm) loan could fit your financial plan.

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Common Questions

Reverse Mortgage (HECM) FAQ

Yes. You retain full ownership and title to your home, just like with a traditional mortgage. The lender has a lien on the property (the same as any mortgage), but you remain the owner. You can live in the home as long as you wish, as long as you maintain property taxes, insurance, and basic home maintenance.
Your heirs have options. They can sell the home and keep any equity above the loan balance. They can refinance the reverse mortgage into a traditional mortgage and keep the home. Or they can deed the property to the lender. Because HECMs are non-recourse loans, heirs will never owe more than the home's appraised value, even if the loan balance exceeds it.
The amount depends on your age, your home's appraised value (up to the FHA lending limit), and current interest rates. Generally, the older you are and the more valuable your home, the more you can access. Your loan officer can provide a detailed estimate based on your specific situation.
No. Reverse mortgage proceeds are not considered income by the IRS, so they are tax-free. This is one of the key advantages of using a reverse mortgage in retirement planning, as the funds do not affect your tax bracket or your Social Security benefits.

Ready to Explore Reverse Mortgage (HECM) Loans?

Let our team walk you through the details, run the numbers for your situation, and help you decide if this is the right program for your goals.

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