Explore how home equity may fit into your retirement strategy, financial goals and your family's long-term plans — with clear, unbiased education and no pressure.
Your home's value, the debt you've paid down, and the equity you've built can play important roles in your future.
The home you have built equity in
Purchase
You found your home
Mortgage
You financed it
Equity
You built value
Retirement
You planned ahead
Options
You chose wisely
Legacy
You prepared them
Build Your Profile
HOME WEALTH PROFILE
Start with your numbers. Understand your position.
Estimated Equity$350,000
LTV (Loan-to-Value)30.0%
Equity Position70.0%
Financial ConsiderationStrong Position
Educational estimate only. This is not an appraisal, underwriting decision or loan approval.
Understand Your Position
HOW MUCH OF YOUR HOME DO YOU ACTUALLY OWN?
Your home's value splits into two parts: the debt secured against it, and the equity that is yours. Move the sliders to see how the split changes.
70%of your home is yours, free and clear
Debt 30%
Equity 70%
Market value$500,000
Mortgage debt$150,000
Your equity$350,000
You own most of your home outright — a strong equity position.
Reverse Mortgage 101
REVERSE MORTGAGE, WITHOUT THE MYSTERY.
A reverse mortgage is a specialized loan that may fit specific situations. Here is what it is, who it is for, and how it actually works.
What it is
A loan secured by your home that lets eligible owners convert part of their equity into cash — while keeping the title in their name.
Who considers it
Typically retired homeowners age 55+ (62+ for an FHA-insured HECM) exploring retirement cash flow or a standby line of credit.
How you receive funds
As a lump sum, fixed monthly payments, a growing line of credit, or a combination — chosen to fit your plan.
What stays your job
Property taxes, homeowners insurance, upkeep, and living in the home as your primary residence. Miss these and the loan can be called due.
Interest & costs
Interest is added to the balance instead of paid monthly, so the balance grows over time. Costs may include origination, appraisal, mortgage insurance, and closing fees.
When it is repaid
Generally when the last borrower sells, permanently moves out, passes away, or fails to meet the loan's obligations. Any remaining equity goes to you or your heirs.
Educational overview only. Terms, eligibility, and costs vary by program, lender, and state.
FHA Insurance Program
UNDERSTANDING THE HECM
The Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage program with specific requirements and protections.
Estimated principal limit$0
Less: mortgage payoff$0
Less: estimated upfront costs$0
Estimated remaining proceeds$0
Eligibility signal—
Educational illustration only. Uses a simplified principal-limit factor and the 2024 HECM limit of $1,149,825. Not a loan approval, quote, or commitment. Eligibility depends on counseling, financial assessment, property standards, and program rules.
Rights & Obligations
YOU DON'T STOP BEING A HOMEOWNER.
You generally keep title to your home while a reverse mortgage is secured against it — but certain conditions and obligations stay with you.
Still your home, still your name on the deed
You keep the title
In most cases you remain the homeowner and your name stays on the deed. The lender's interest is only a lien on the property — the same way a regular mortgage works.
The obligations stay with you
Keep property taxes and homeowners insurance paid, maintain the home, and live in it as your primary residence. Fall behind on any of these and the loan can be called due.
Cost Transparency
WEALTH HAS A COST. UNDERSTAND IT BEFORE YOU USE IT.
Reverse mortgage costs can vary. Here are the typical expense categories to understand.
Illustrative only. Actual costs depend on the property, lender, state, and loan program. Interest rate is shown for context and is not added to the upfront total.
Ongoing Costs
HOMEOWNERSHIP RESPONSIBILITIES DON'T DISAPPEAR.
Even with a reverse mortgage, borrowers maintain all standard homeowner obligations.
✓
Property Taxes
Due annually. Non-payment can lead to serious consequences.
✓
Homeowners Insurance
Required to remain in force throughout the loan.
✓
Property Maintenance
Home must be maintained to FHA property standards.
✓
Primary Residence
Home must remain your primary residence for most of the year.
✓
HOA Dues (if applicable)
Must remain current on any homeowners association fees.
✓
Loan Obligations
Interest continues to accrue. Loan balance grows.
Evaluate Options
WHICH PATH FITS YOUR OBJECTIVE?
Different strategies address different goals. Compare before deciding.
Strategy
Best For
Key Trade-Off
Consider
Reverse Mortgage
Retirement income, no monthly payment
Costs & loan balance growth
Age, occupancy, obligations
HELOC
Flexible access to credit
Variable rates & payments
Rate environment, cash flow
Home Equity Loan
Fixed-rate borrowing
Monthly payment obligation
Qualification, repayment ability
Cash-Out Refinance
Replace mortgage, access equity
New loan terms, refinance costs
Rates, credit, loan amount
Retirement Planning
YOUR HOME CAN BE ONE PIECE OF A LARGER RETIREMENT PLAN.
Understand the relationship between your home equity, retirement income, and monthly expenses.
Where housing wealth meets the household budget
Annual Shortfall / Surplus$0
Monthly Gap$0
Illustration only. Not financial advice. Actual retirement needs vary significantly by household.
Multi-Generation Impact
WHAT DOES YOUR HOME MEAN FOR THE NEXT GENERATION?
Home and legacy decisions affect your family's future. Understanding the timeline helps.
The conversation your heirs will thank you for
TODAY
Home value: established
Mortgage balance: known
Equity position: quantified
Retirement timeline: set
DURING RETIREMENT
Income sources: diversified
Expenses: managed
Homeownership: maintained
Loan balance: if applicable, growing
FUTURE & LEGACY
Family considerations: heirs
Property disposition: sale/transfer
Loan repayment: when due
Estate value: remaining equity
Exact outcomes depend on the loan program, home appreciation, market conditions, and personal circumstances. This is illustrative planning only.
Communication
IMPORTANT FINANCIAL DECISIONS SHOULD NOT BE A SURPRISE TO YOUR FAMILY.
A productive family conversation covers key considerations and helps everyone understand the plan.
?
Why are we considering this?
Clarity on the motivation helps everyone understand the reasoning.
?
What alternatives did we consider?
Understanding options helps validate the decision.
?
What happens if we move?
Plans can change. Family should know repayment triggers.
?
What happens after death?
Heirs need to understand implications for the home and estate.
SOMETIMES PRESERVING HOME EQUITY IS THE BETTER PRIORITY.
Reverse mortgages are one option among many. For some households and circumstances, other paths deserve consideration.
•
Planning to move soon: A reverse mortgage may not be the right choice if relocation is anticipated.
•
Limited home equity: A reverse mortgage only works if you have substantial equity available.
•
Short-term financing needs: Other loans may be simpler for temporary cash needs.
•
Preserving equity for heirs: If leaving maximum inheritance is the priority, preserving equity may matter more.
•
Difficulty with ongoing obligations: If meeting property tax, insurance, and maintenance is challenging, a reverse mortgage may add risk.
Myth vs Reality
MYTHS AND FACTS.
Confusion grows when key terms are misunderstood. Here is what is actually true.
Myth
“The bank owns my home.”
Fact
You keep title and ownership. The lender only holds a lien securing the loan. You and your estate remain the owner.
Myth
“It's free money.”
Fact
It's a loan with interest, fees, and costs. The balance grows over time and is repaid when the loan becomes due.
Myth
“My children lose the house.”
Fact
Not automatically. Heirs may keep it by repaying the loan, sell it and keep any remaining equity, or hand it back — and are never personally liable beyond the home's value.
Myth
“I stop paying taxes and insurance.”
Fact
No. Those obligations remain, and missing them can trigger default and serious consequences.
Myth
“Everyone over 62 qualifies.”
Fact
Eligibility depends on age, home equity, property type, occupancy, a financial assessment, and counseling — among other factors.
Myth
“A reverse mortgage removes all costs.”
Fact
Property taxes, insurance, maintenance, and any HOA dues continue. Those ongoing costs don't disappear.
Knowledge Center
FREQUENTLY ASKED QUESTIONS
Answers to common questions about reverse mortgages, HECM, home equity, and retirement planning.
A reverse mortgage is a loan that allows homeowners to access a portion of their home equity without selling or relocating. The loan is secured by the home and becomes due when the borrower sells, moves, or passes away.
HECM stands for Home Equity Conversion Mortgage. It is a reverse mortgage program insured by the Federal Housing Administration (FHA). HECMs have specific borrower requirements, property standards, and counseling requirements.
Home equity is the difference between your home's estimated market value and the amount you owe on mortgages or other liens secured by the property.
For traditional reverse mortgages, borrowers are typically age 55 or older. For HECM loans, the borrower must generally be 62 or older.
No. You retain title and ownership of your home. The reverse mortgage is a loan secured by the property. The loan becomes due when you sell, move, or pass away.
Yes. With a reverse mortgage, you typically must keep your home as your primary residence. Moving away or moving to a long-term care facility can trigger repayment of the loan.
The loan becomes due and payable. Heirs may sell the home to pay off the loan, refinance it, or work with the lender. The estate may inherit remaining equity after loan repayment.
Heirs may inherit the home if they choose to keep it and can refinance or pay off the loan. Alternatively, they may sell the property and use proceeds to settle the loan obligation.
If the home sale proceeds are insufficient to pay off the loan, federal insurance (in the case of HECM) typically covers the shortfall. Heirs are not personally liable for the difference.
You can move, but the reverse mortgage loan becomes due and must be repaid. If you move and do not sell the home within a certain timeframe, the loan may enter default.
Costs may include origination fees, appraisal charges, mortgage insurance, credit report fees, title insurance, closing costs, servicing fees, and interest. Costs vary by lender and loan program.
Yes. Borrowers remain responsible for all property taxes. Failure to pay property taxes can result in tax liens and may trigger loan default.
Yes. Homeowners insurance is required and must remain in force during the life of the reverse mortgage loan. Lapse in coverage can trigger default.
Yes. The property must be maintained to FHA property standards if it is an HECM loan. Failure to maintain the property can trigger default.
If you cannot pay property taxes, insurance, or maintain the home, the loan can enter default and become due and payable. This is a serious situation that requires immediate attention.
Generally, you cannot have more than one reverse mortgage loan on the same property. A second property may be eligible for its own reverse mortgage if it meets eligibility requirements.
Yes. Borrowers can pay off a reverse mortgage at any time without penalty. Early repayment can reduce the total interest paid.
If home value drops significantly, you may owe more than the home is worth. Federal insurance (HECM) protects lenders from such shortfalls. Heirs are not liable for the difference.
The available loan amount depends on age, home value, interest rates, the appraised value, the property type, and any existing mortgages or liens.
A HELOC is a line of credit requiring monthly payments. A reverse mortgage is a loan that typically doesn't require monthly payments but does accrue interest and becomes due when you move, sell, or pass away.
Terminology
FINANCIAL GLOSSARY
The portion of your home's value that you own outright, calculated as the market value minus any mortgages or liens.
A loan secured by a home that allows eligible homeowners to access home equity without monthly payments. The loan is repaid when the borrower moves, sells, or passes away.
A federally insured reverse mortgage program offered by the FHA. HECMs have specific requirements including borrower age, counseling, and property standards.
A revolving line of credit secured by home equity. Borrowers can draw funds as needed and typically make monthly interest payments. Rates are usually variable.
A ratio comparing the loan amount to the property's appraised value, expressed as a percentage. For example, an 80% LTV means you've borrowed 80% of the property's value.
The annual cost of borrowing including interest rate and fees, expressed as a percentage. APR provides a more complete picture of borrowing cost than interest rate alone.
The original amount borrowed. In a reverse mortgage, the principal is the amount disbursed to the borrower. Interest is charged on the outstanding principal balance.
The cost of borrowing money, expressed as a percentage of the loan balance. In a reverse mortgage, interest is added to the loan balance rather than paid monthly.
Insurance protecting the lender if the borrower cannot repay. On HECM loans, FHA mortgage insurance is required and protects both borrower and lender.
An independent professional estimate of a property's market value. Appraisals are required for most loans and reverse mortgages.
Required educational session for HECM borrowers conducted by a HUD-approved counselor. Counseling covers product details, costs, obligations, and alternatives.
The company that manages the day-to-day servicing of a loan, including collecting payments, maintaining escrow accounts, and sending statements.
A loan where the lender cannot pursue the borrower personally for any shortfall. Most reverse mortgages are non-recourse, protecting heirs.
Fees and expenses associated with finalizing a loan, including title insurance, recording fees, attorney fees, and underwriting charges.
Failure to meet the terms of a loan agreement. In reverse mortgages, default can occur from failure to pay taxes, insurance, or maintain the property.
Contact Us
Reach a housing wealth educator.
Questions about home value, equity, HECM, or retirement planning? Reach out — there is never any cost or obligation.
How to reach us
We answer questions by email so everything is in writing. Expect a reply within one business day.
