Retirement can be a time of freedom, rest, and relaxation. However, many retirements are filled with worry and stress over finances. Many people find themselves worrying that they will not be able to afford the retirement they want or that they may not be able to keep the home they love. Many don’t know about a program that can help them not only save money, but also stay in their home. This program is called a Home Equity Conversion Mortgage (HECM) – better known as a reverse mortgage.

What is a Reverse Mortgage?

A reverse mortgage helps homeowners receive cash payments based off the equity of their homes. The money the homeowner receives is tax free* and can be used to pay off an existing mortgage**. The rest of the proceeds can be used however the homeowner chooses.

How Do You Qualify for a Reverse Mortgage?

A reverse mortgage is an exclusive program for homeowners who are 62 years or older. Age isn’t the only qualification. The home that you want a reverse mortgage on must also be your primary residence and you need to have a good amount of equity in your home too. You must also be able to uphold your responsibilities as a homeowner, which include paying taxes, insurance, and home maintenance costs.

How Can You Receive Your Money?

There are a few different reverse mortgage program options. Based off the program you decide to go with, you will have three different options to collect your proceeds.

  • You can receive the money in one lump sum payment
  • You may set up a line of credit and that gives you the availability to get and use your money whenever you want.
  • You can receive your proceeds as fixed monthly payments as well

How Can You Use Your Reverse Mortgage Proceeds?

The good thing about a reverse mortgage is it gives you the opportunity to use your money in any way you want. You are not restricted to spend your money only on certain things. Some ways people use their reverse mortgages include:

  • Paying off debts and medical bills
  • Paying for various home improvements
  • Supplementing their income
  • Delaying social security payments
  • Saving the money for emergency or as-needed situations

What is the Reverse Mortgage Process?

The process of getting a reverse mortgage may not be as difficult as you might think. The reverse mortgage process has five steps. It starts with speaking to a licensed expert about your current situation. The second part of the process is completing your application and attending the required counseling. During this step a professional expert will go over the application with you and help you make a counseling appointment.

The third step is appraisal. During this step your house will be appraised. The last two steps of the process are closing/disbursement and repayment. During closing/disbursement we will come to you at your convenience and close the loan. The final step, repayment, does not happen until you no longer occupy the home or pass away. Once this happens, your loan comes due.

*Please consult with your financial adviser.


**Homeowner is still responsible for taxes, insurance and property maintenance.