Reverse Mortgage Refinance and Purchase Loans

Reverse residential lending, also known as a reverse mortgage, is a type of home loan available to homeowners age 62 or older. It allows them to access part of the equity in their home—without having to make monthly mortgage payments.

Instead of you paying the lender, the lender pays you, using your home’s equity as collateral.

It’s a financial tool that helps seniors:

• Cover living expenses
• Pay off existing mortgages or debts
• Supplement retirement income
• Age in place without selling their home

🔄 How Does a Reverse Mortgage Work?

When you take out a reverse mortgage:

• The loan amount is based on your age, home value, and current interest rates.
• You can choose to receive the money as:
  • A lump sum
  • Monthly payments
  • A line of credit
  • Or a combination of these options
• You remain the owner of the home and continue to live in it.
• You are not required to make monthly mortgage payments, but:
  • You must pay property taxes
  • Maintain homeowners insurance
  • Keep the property in good condition

The loan is repaid when:

• You sell the home
• You move out permanently (such as into assisted living)
• Or you pass away

At that point, the home is usually sold, and the proceeds are used to pay off the loan balance. Any remaining equity goes to you or your heirs.

✅ Key Benefits of Reverse Lending

• No monthly mortgage payments required
• Tax-free cash from your home equity
• You keep ownership and title of your home
• Flexible payout options (lump sum, line of credit, monthly income)
• Federally insured through the Home Equity Conversion Mortgage (HECM) program
• You can never owe more than the home is worth (non-recourse loan)

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🧾 Basic Requirements

To qualify for a reverse mortgage:

• Age: At least 62 years old
• Home Type: Must be your primary residence
  • Single-family homes
  • FHA-approved condos
  • Some manufactured homes
• Equity: You must have substantial home equity (typically 50%+)
• Financial Ability: You must show that you can continue paying:
  • Property taxes
  • Homeowners insurance
  • HOA dues (if applicable)
• Counseling: Must complete a HUD-approved counseling session before moving forward

🔍 What Happens to the Home?

When the borrower:

• Passes away, or
• Moves out of the home permanently, or
• Sells the home

The reverse mortgage becomes due. Typically, the home is sold, the loan is repaid from the sale proceeds, and any leftover equity goes to the homeowner (or their estate).

If heirs want to keep the home, they can pay off the loan balance (often by refinancing) and retain the property.

📊 Reverse vs. Traditional Mortgage

Feature	Traditional Mortgage	Reverse Mortgage
Monthly Payments	Required	Not required
Age Requirement	None	62+ only
Loan Balance Over Time	Decreases (you pay it down)	Increases (as lender pays you)
Access to Equity	Refinance or sell	Withdraw equity while staying put
Repayment Due	Monthly	When you move, sell, or pass away
Ownership	You retain title	You still retain title

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❗ Things to Watch Out For

• Home equity decreases over time as loan balance grows
• You must still pay taxes, insurance, and upkeep
• Heirs may inherit less if the home’s equity is used up
• Fees and closing costs can be higher than a traditional loan
• You must live in the home—moving out triggers repayment

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🤔 Is a Reverse Mortgage Right for You?

A reverse mortgage may be a good fit if:

• You’re 62+ and plan to stay in your home long-term
• You have significant equity and want to improve your cash flow
• You prefer to age in place rather than downsize or sell
• You want to eliminate monthly mortgage payments
• You’re looking for flexible financial options in retirement

💬 Common Uses of a Reverse Mortgage

• Supplementing Social Security or pension income
• Paying off an existing mortgage
• Covering medical or long-term care expenses
• Funding home repairs, improvements, or accessibility upgrades
• Building a financial cushion with a reverse line of credit