What is a Reverse Mortgage

Learn about reverse mortgages and see how your home equity can be leveraged as a tool in your retirement years.

A reverse mortgage is a powerful tool that enables older homeowners age 62 (If married, only one person needs to be 62), to tap into a portion of their home equity and convert it to cash so they can live better in retirement. Also known as a home equity conversion mortgage (HECM), this federally insured program is designed to help retirees access the home equity they’ve accumulated through tax-free loan proceeds* without having to sell or vacate their property.

These loans allow homeowners to access the equity they’ve accumulated in their homes and use it to supplement their retirement income. There’s no monthly payment required, so borrowers can significantly increase their cash flow for a higher quality of living. There are very few restrictions on how you can use your loan proceeds. Use the money to pay off a car loan or credit card, renovate your home, take care of unexpected expenses—it’s all up to you. If you have an existing mortgage, you can use a reverse mortgage to pay it off to eliminate monthly payments and use the remaining proceeds however you see fit.

The government launched the reverse mortgage program—known as the home equity conversion mortgage or HECM—in 1989 to offer

Americans a means to finance their longevity. Since then, there have been over 1,000,000 originated in the USA.

*Reverse mortgage loan proceeds are typically not considered taxable income. However, you should consult a financial advisor and appropriate government agencies for the possible effect they may have on taxes and/or benefits.