1,401,176 HECM reverse mortgages insured by FHA since 1989.
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Reverse mortgage guide
A reverse mortgage can turn part of your home equity into cash, a line of credit, or monthly payments while you keep living in your home. There are no required monthly mortgage payments, but you must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. The biggest pros are flexibility, a line of credit that can grow, and non-recourse protection on a HECM. The biggest cons are high upfront costs and a balance that grows over time, which uses up equity. It fits best when you plan to stay in your home for years and can keep up with the costs of owning it.
This page is the conversation I'd have with you across the kitchen table. Both sides, plainly, with the details that actually decide whether a reverse mortgage fits.
The pros:
The cons:
A reverse mortgage is a loan against your home for homeowners 62 and older (for a HECM). Instead of you paying the lender each month, interest and mortgage insurance are added to the loan balance. The loan is repaid later, usually when the home is sold after the last borrower moves out or dies.
There are no required monthly mortgage payments. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
Most reverse mortgages are HECMs, which are insured by FHA. Some are proprietary (jumbo) reverse mortgages from private lenders, with their own rules. For the step-by-step version, see How a Reverse Mortgage Works.
This is the big one for most people. If you still have a mortgage, the reverse mortgage pays it off at closing, and that monthly payment goes away. If your home is paid off, you can turn some of your equity into money without adding a payment.
You can still make payments if you want to, and they lower your balance. But you don't have to.
What doesn't go away: you must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. If those costs are hard for you now, read the cons below carefully.
You still own your home. The lender holds a lien, just like with a regular mortgage. You can sell whenever you want, pay the loan off, and keep whatever equity is left. See Do I still own my home if I get a reverse mortgage?
On an adjustable HECM you can choose:
You can generally change how you receive money later, for a small fee. On a fixed-rate HECM, you get a single lump sum at closing.
On an adjustable HECM, the unused part of your line of credit grows over time, at the same rate as your loan balance. The longer you leave it alone, the more you can draw later.
And unlike many bank HELOCs, a HECM line of credit can't be frozen, reduced, or closed by the lender as long as you meet the loan terms. That made a real difference for people in 2008, when many HELOCs were frozen. This is why some people open one early as a safety net. Read about the standby line of credit strategy and HECM vs. HELOC.
A HECM is a non-recourse loan. If the home sells for less than the loan balance, you and your heirs don't pay the difference. FHA insurance covers it.
If your heirs want to keep the home, they generally don't have to pay more than the lesser of the loan balance or 95 percent of the home's appraised value. See Are reverse mortgages non-recourse loans?
If your spouse is under 62 and can't be on the loan, they can generally still stay in the home after you die, as an eligible non-borrowing spouse. See the Non-Borrowing Spouse guide.
With a HECM for Purchase, you can buy a home that fits your next stage of life, like a single-story home closer to family, with a down payment and no required monthly mortgage payments afterward. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
Loan money is generally not taxable income, because it's a loan. It generally doesn't affect Social Security or Medicare. Ask your tax advisor about your own situation. See Will a reverse mortgage affect my Social Security or Medicare?
A HECM has an origination fee, FHA's upfront mortgage insurance, and the usual closing costs like title, appraisal, and recording. On many loans, those costs are higher than on a regular mortgage or a HELOC. They can usually be paid from the loan, but that still adds to your balance.
That's why a reverse mortgage is a poor tool for a short-term need. The longer you keep it, the more those upfront costs are spread out. See Reverse Mortgage Costs and What Is the TALC?
Every month, interest and mortgage insurance are added to your balance. Because the next month's interest is figured on a bigger balance, it compounds. Over many years, the balance can grow a lot, especially if you take a large amount early.
Two things help: you only pay interest on money you've actually drawn, and you can make voluntary payments any time.
As the balance grows, the equity left for you or your heirs shrinks. If leaving the home free and clear is your top goal, a reverse mortgage works against it. Talk it over with your family. See Will my family lose their inheritance?
The loan can come due if you:
Before approving a HECM, the lender reviews your income, credit, and history of paying these bills. If it looks like you might struggle, part of the loan can be set aside to pay them for you. See Reverse Mortgage Financial Assessment.
If you might move in the next few years, the upfront costs are hard to justify. A HELOC, a smaller home, or another option with lower costs may make more sense.
Medicaid and SSI look at the money you have. Loan money you draw and keep in the bank past the month you receive it can count against those limits. If you get or may need those benefits, talk with a benefits professional before you draw large amounts. See Paying for In-Home Care With a Reverse Mortgage.
If you're married and your spouse is younger, the younger age is used in the math, which lowers how much you can access. And no more money is paid out after the borrower dies. That needs a plan.
Because interest is added to your balance instead of paid each month, you generally can't deduct it year by year. It may be deductible when the loan is paid off. Ask your tax advisor.
Most of the problems I've seen with reverse mortgages came from pressure, not the loan itself: someone pushing a senior to use the money for an investment, an annuity, or a family member's needs. HUD rules bar lenders from requiring you to buy other products as a condition of a HECM. Take your time, bring family, and never sign something you don't understand. HUD-approved counseling is required before any HECM for this reason. See Reverse Mortgage Counseling.
| Topic | Pros | Cons |
|---|---|---|
| Monthly payments | No required monthly mortgage payments | You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms, or the loan can come due |
| Your equity | Turn part of it into a lump sum, monthly payouts, or a line of credit | The balance grows over time, leaving less equity for you or your heirs |
| Costs | Costs can usually be paid from the loan | Upfront costs are high, so it's a poor fit for a short stay |
| Flexibility | On an adjustable HECM, the unused line of credit grows and can't be frozen while you meet the terms | Fewer choices on a fixed-rate HECM: one lump sum at closing |
| Protection | Non-recourse on a HECM, and protection for an eligible non-borrowing spouse | A younger spouse lowers the amount available |
| Benefits and taxes | Loan money is generally not taxable income and generally doesn't affect Social Security or Medicare | Money you hold can count against Medicaid or SSI limits, and interest isn't deductible until it's paid |
| Ownership | You keep the title | The loan is repaid when you move out or pass away, usually by selling the home |
Reverse mortgages have a reputation as a last resort for people who are house rich and cash poor. In my experience, the people it helps fall into three groups.
A reverse mortgage isn't the only way to use your home's value. Here's how the common alternatives compare.
Lower upfront costs, but you make monthly payments, and a HELOC can be frozen or reduced by the bank. Better for short-term needs if you can afford the payment. See Home Equity and HELOC and HECM vs. HELOC.
You get cash and a new mortgage with a monthly payment. It can make sense if you have strong income and want to keep more equity. See Refinance.
You free up equity with no new loan, but you pay selling and moving costs and leave your home. If the home no longer fits you, this may be the best answer, and I'll say so.
You free up all your equity, but you give up owning, and rent can rise over time.
Some states and counties offer property tax deferral or relief programs for seniors. Family help, part-time work, or adjusting your budget can also bridge a gap. A financial advisor can help you weigh these.
Two of the best-known critics are Suze Orman and Dave Ramsey. See what each has said, with sources, and how it lines up with today's rules: What Suze Orman Says About Reverse Mortgages and What Dave Ramsey Says About Reverse Mortgages.
No required monthly mortgage payments, flexible ways to get your money, a line of credit that can grow, keeping your title, and non-recourse protection on a HECM. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
High upfront costs, a growing balance, less equity for heirs, ongoing obligations that can make the loan come due, and possible effects on needs-based benefits.
The loan can become due if you stop living in the home as your primary residence, or if you don't meet the loan terms, such as paying property taxes and homeowners insurance and keeping up the home. That's why the lender reviews your finances first.
Usually when you need money for a short time, plan to move within a few years, and can comfortably make monthly payments.
HUD doesn't set a minimum credit score for a HECM. But the lender reviews your credit and payment history as part of the financial assessment.
Yes, for a HECM. You meet with an independent, HUD-approved counselor before you apply. See Reverse Mortgage Counseling.
Not all of it, in most cases. The loan is repaid first, and any equity left over goes to your estate.
I always suggest including your spouse, your heirs, and anyone your decision affects. Good topics: staying in your home as you age, your estate plan, how the loan gets repaid, and any effect on benefits.
I'm happy to join that family conversation. When you're ready, get your estimate, see today's rates, or call us at 530-888-6000.
ZYNG Mortgage, Inc., NMLS #76801. A reverse mortgage has no required monthly mortgage payments and uses your home's equity. Fees, mortgage insurance and other costs can be added to the loan balance, and the balance grows over time as interest is added, so your equity typically decreases. When the loan becomes due, the home may need to be sold, or the loan repaid from other funds. Interest is not tax-deductible until it is paid, in part or in full. You keep title to your home and must keep paying property taxes, homeowners insurance and upkeep, and meet the other loan terms; not doing so can make the loan due and could lead to foreclosure.
This material is not from HUD or FHA and was not approved by HUD or a government agency.
HECM count at the top of this page: HUD data through September 2026 (source, opens in a new tab).
