Reverse Mortgages
Your home equity, working for your retirement.
A reverse mortgage lets homeowners age 62 and older turn part of their home equity into cash without taking on a required monthly mortgage payment. You keep the title to your home and continue to live in it.
- For homeowners 62 and older
- No required monthly mortgage payment
- You keep the title and stay in your home
You must still pay property taxes, homeowners insurance and upkeep. No obligation. Prefer to text? Text (949) 910-3943.
At a glance
- Minimum age
- 62 for a HECM
- Monthly mortgage payment
- None required
- Property use
- Primary residence
- Most common type
- FHA-insured HECM
Why a reverse mortgage
Use your equity without selling your home
For many homeowners, the house is their largest asset. A reverse mortgage is one way to use it while you keep living there.
No required monthly payment
There is no required monthly mortgage payment. You still pay property taxes, insurance and upkeep.
Stay in your home
You keep the title and continue to live in the home as your primary residence.
Pay off your current mortgage
Many borrowers first use the proceeds to pay off an existing mortgage, which removes that monthly payment.
Choose how you are paid
Take a lump sum, monthly payments, a line of credit or a combination.
Non-recourse protection
With a HECM, you or your heirs will not owe more than the home is worth when it is sold to repay the loan.
Counseling comes first
You complete a session with a HUD-approved counselor, so you understand the loan before you commit.
How it works
The loan pays you
Instead of you paying the lender each month, the loan pays you. Interest and fees are added to the loan balance over time, so the balance grows and your equity shrinks. The loan is generally repaid when the last borrower sells the home, moves out permanently or passes away.
| Ways to receive your money | How it works |
|---|---|
| Lump sum | A single payout at closing |
| Monthly payments | Regular payments to add to your income |
| Line of credit | Funds you draw on when needed |
| Combination | A mix of these options |
The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the FHA.
Want to know what your home could qualify for?
What to weigh first
Know the trade-offs
A reverse mortgage is not right for everyone. These are the points I walk through with every client and their family.
Costs and obligations
- You must keep paying property taxes, insurance and maintenance. Falling behind can put the loan in default.
- The loan balance rises over time, which leaves less equity for you or your heirs.
- Upfront costs can be higher than on a traditional mortgage.
Protections
- A HECM is non-recourse: you or your heirs will not owe more than the home is worth when it is sold to repay the loan.
- A session with a HUD-approved counselor is required before you apply.
- You keep the title to your home.
Qualifying
Do you qualify?
Typical requirements
- The youngest borrower is at least 62 for a HECM
- The home is your primary residence
- You own the home outright or have substantial equity
- You complete a session with a HUD-approved counselor
- You can keep up with property taxes, homeowners insurance and upkeep
What you will need
- A government-issued photo ID showing your date of birth
- Your current mortgage statement, if you have a loan
- Your property tax bill and homeowners insurance policy
- Your counseling certificate
- Basic income and asset information
The process
From first call to funding
Talk it through
We review your goals, your home and the alternatives. Family members are welcome on the call.
Counseling session
You meet with an independent HUD-approved counselor before applying.
Application and appraisal
I take your application and order the appraisal that sets your home’s value.
Closing and funding
You sign, any existing mortgage is paid off and you receive your funds the way you chose.
Common questions
Reverse mortgage questions, answered
Do I still own my home?
Yes. You keep the title and continue to live in the home.
When does the loan have to be repaid?
Generally when the last borrower sells the home, moves out permanently or passes away.
Do I still pay property taxes and insurance?
Yes. You must keep paying property taxes, homeowners insurance and maintenance. Falling behind can put the loan in default.
What if I still have a mortgage?
You can still qualify if you have substantial equity. Many borrowers use the proceeds to pay off the existing mortgage first.
What happens to my heirs?
The loan balance reduces the equity left in the home. With a HECM, you or your heirs will not owe more than the home is worth when it is sold to repay the loan.
How much can I receive?
It depends on your age, your home’s value, interest rates and program guidelines. I will run your numbers with no obligation.
Is a reverse mortgage right for you?
It depends on your age, your equity and your plans for the home. I will walk you and your family through the numbers and the alternatives, with no pressure.
This material is not from HUD or FHA and has not been approved by HUD or any government agency. This is general information, not a loan offer, rate quote or commitment to lend. Eligibility, loan amounts and terms depend on your age, home value, interest rates and program guidelines. Mack Davidson, NMLS #1006831, CA DRE #02086053, E Mortgage Capital, Inc., NMLS #1416824. Equal Housing Opportunity.