A reverse mortgage flips the usual mortgage relationship: instead of you paying a lender every month, the lender pays you, drawing on your home's equity. You keep living in and owning your home. The balance grows over time as interest accrues, and becomes due when the last borrower sells, moves out permanently, or passes away.
Before anything else, you complete an independent, HUD-approved counseling session covering how the loan works and alternatives to consider.
Your home is appraised to establish value, and your financial situation is reviewed as part of a required financial assessment.
Once approved, you close on the loan. Any existing mortgage is paid off first from the proceeds, if applicable.
You continue living in your home with no required monthly mortgage payments, receiving funds as a lump sum, line of credit, monthly payments, or a combination.
The Federal Housing Administration insures HECMs, protecting both the lender and the borrower.
If the loan balance grows larger than the home's value, FHA insurance covers the difference — not you or your heirs.
Heirs can repay the loan and keep the home, sell it and keep remaining equity, or let the lender settle the loan through sale.
See a direct side-by-side comparison of staying with a reverse mortgage versus selling outright.
Reverse Mortgage vs. Selling →Private consultation with Kelly or Ray Nadeau. We'll walk through your specific home, equity, and goals — no obligation.
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