Reverse Mortgages

What Is a Reverse Mortgage?

A reverse mortgage is a loan that lets homeowners convert part of their home equity into funds without selling the home. Instead of making monthly payments to a lender, as with a traditional mortgage, the loan balance generally grows over time as interest and fees are added. The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration.

How Does a Reverse Mortgage Work?

With a traditional mortgage, you borrow money and repay it monthly, building equity as the balance goes down. With a reverse mortgage, you receive funds based on your home’s equity, and no monthly principal and interest payments are required as long as you meet the loan requirements. The loan generally becomes due when the last borrower sells the home, moves out permanently, or passes away. At that point, the home is typically sold or the balance is repaid, and any remaining equity belongs to you or your heirs.

Ways to Receive Your Funds

Reverse mortgage proceeds can often be received in different ways, depending on the program:

Lump Sum

Receive the available funds at once, which can be useful for paying off an existing mortgage or covering a large expense.

Monthly Payments

Receive steady payments over a set period or for as long as you live in the home, helping supplement retirement income.

Line of Credit

Set up a line of credit you can draw from as needed. Unused funds in some programs may grow over time.

A Combination

Many homeowners choose a mix of options to suit their needs.

Common Reasons Homeowners Consider a Reverse Mortgage

Supplementing retirement income to support everyday living
Paying off an existing mortgage to eliminate required monthly mortgage payments
Covering healthcare or long-term care expenses
Funding home repairs or accessibility upgrades to age comfortably in place
Creating a financial safety net through a line of credit
Reducing reliance on savings and investments during market downturns

Basic Eligibility Requirements

Eligibility depends on the program, but generally includes:

Age: At least 62 years old. For married couples, spouse protections may apply, so it’s important to discuss your situation.
Primary residence: You must live in the home as your main residence.
Sufficient equity: Many borrowers have paid off their mortgage or have substantial equity, and any existing mortgage is typically paid off with the proceeds.
Eligible property type: Single-family homes and certain other property types may qualify.
Financial assessment: Lenders review your ability to keep up with ongoing homeowner costs.
HUD-approved counseling: Required for HECM borrowers, so you fully understand the loan before moving forward.

Your Responsibilities as a Homeowner

A reverse mortgage doesn’t eliminate your obligations as a homeowner. You must continue to:

Pay property taxes
Keep homeowners insurance in force
Pay any HOA dues
Maintain the home in good condition
Live in the home as your primary residence

Failing to meet these requirements can put the loan in default, so it’s important to plan for these costs.

Reverse Mortgage Pros and Cons

	Potential Advantages	Important Considerations
Payments	No required monthly mortgage payment while loan terms are met	Balance grows over time as interest and fees accrue
Home ownership	You remain on title and keep living in your home	You’re responsible for taxes, insurance, and upkeep
Equity	Access value you’ve built	Equity typically decreases over time, leaving less for heirs
Funds	Flexible payout options	Upfront costs and mortgage insurance premiums apply
Taxes	Proceeds are generally not considered taxable income	Speak with a tax professional about your situation
Benefits	Can improve cash flow	May affect eligibility for certain needs-based government benefits

A reverse mortgage isn’t right for everyone, and it’s a significant decision. Jerry will help you weigh these points honestly.

What About Heirs?

With a HECM, the loan is generally non-recourse, which means you or your heirs won’t owe more than the home’s value when the loan is repaid, as long as loan terms are met. Heirs can typically choose to keep the home by repaying the loan, sell it and keep any remaining equity, or hand it over to the lender. It’s wise to include your family in the conversation early.

Reverse Mortgage vs. Other Equity Options

Other ways to access equity may fit different goals. A HELOC provides a flexible line of credit but requires monthly payments. A traditional refinance, such as a conventional loan refinance, can lower your rate or change your term but also requires monthly payments. Jerry can compare these options with you so you can see how each affects your cash flow and long-term plans.

Serving Homeowners Across 14 States

Jerry Ownby proudly serves homeowners throughout Arizona, Alaska, California, Colorado, Florida, Georgia, Maryland, Montana, Ohio, Texas, Utah, Washington, South Carolina, and West Virginia.

The Reverse Mortgage Process, Step by Step

Consultation: Talk with Jerry about your goals and retirement plans.
Review your options: Explore payout choices and how they affect you.
HUD-approved counseling: Complete the required session.
Application and documentation: Submit your financial details.
Appraisal and underwriting: Your home and file are reviewed.
Closing: Finalize your loan and begin using your funds.

Explore your options with the loan calculator and check today’s rates.

Honest Guidance for an Important Decision

Reverse mortgages deserve careful consideration. Jerry provides clear, unhurried explanations and encourages you to involve family members, financial advisors, or tax professionals so you feel fully confident in your choice.

Ready to Learn More?

Call Jerry Ownby at 480-980-0900 or visit 459 N Gilbert Rd, Suite B100, Gilbert, AZ 85234 to discuss whether a reverse mortgage fits your retirement goals.

Enjoy Greater Financial Freedom in Retirement