Reverse Mortgage Questions and Answers

It is a loan that pays you money out of your house. You stay in the house, your name stays on the title, and you make no monthly mortgage payments. The loan gets paid back later, from the sale of the house, after you move out or pass away. To qualify you must be 62 or older and the home must be where you actually live.

A lender pays you part of your home's value: all at once, as monthly checks, or as a credit line you use when you need it. Instead of you paying interest each month, the interest is added to the loan balance. When the last borrower sells, moves out for over 12 months, or passes away, the house is usually sold, the loan is repaid, and everything left over goes to you or your family. The full mechanics are here.

Anyone 62 or older who lives in their own home and has meaningful equity, usually half the home's value or more. The lender checks that you can keep paying property taxes and insurance. Your credit score matters much less than with a normal mortgage.

HECM (Home Equity Conversion Mortgage) is the official government name for the FHA-insured reverse mortgage. When anyone says reverse mortgage, they almost always mean a HECM. The only other kind is a private jumbo reverse mortgage for homes worth more than the FHA limit.

Usually 30 to 45 days from application to money in hand. Before applying you complete a required session with an independent HUD-approved counselor, and California gives you 7 days after that to think it over before any lender may take your application.

The classic three: the government-insured HECM (most common), the jumbo or proprietary reverse mortgage from private lenders for high-value homes (up to $4 million), and single-purpose loans from agencies for one specific bill like property taxes. There is also a fourth variation, the HECM for Purchase, which lets you BUY a home with a reverse mortgage. All four types, explained simply.

Possibly. The standard federal program requires age 62, but some jumbo (proprietary) programs in California accept borrowers as young as 55. Younger borrowers get a smaller share of the home's value. See the jumbo guide.

Usually between 35 and 60 percent of your home's value. Your exact number depends on the youngest borrower's age, the appraised value (counted up to the 2026 FHA limit of $1,249,125), and interest rates. Older homeowners get more. Any existing mortgage gets paid off first from these funds. Get your free estimate here.

No. The IRS treats it as a loan, not income. It does not raise your tax bracket. Check with a tax advisor about your own situation, but loan money is not taxed.

No. Social Security and Medicare do not look at your savings or loans. Two programs that CAN be affected are SSI and Medi-Cal, because they are means-tested: reverse mortgage money left sitting in your bank account past the month you receive it can count against their limits. If you receive SSI or Medi-Cal, talk to a benefits counselor before taking a lump sum.

The real numbers: 2 percent of your home's value upfront for FHA insurance, half a percent per year on the balance for ongoing insurance, an origination fee capped at $6,000, plus normal closing costs like the appraisal and title. Most of it rolls into the loan, so little cash leaves your pocket. Any honest lender will put every fee in writing before you commit.

It moves with the market, like any mortgage, and comes two ways: fixed if you take one lump sum, adjustable if you take monthly payments or a credit line. You never make a monthly payment either way; the rate just controls how fast the balance grows and how much you qualify for upfront.

Yes, any time, any amount, no prepayment penalty. Some people pay just the interest each year to keep the balance from growing. You are never locked in.

No. This is the single biggest myth about reverse mortgages. Your name stays on the title, exactly as it is today. The lender holds a lien, which is precisely what your original mortgage lender held. You own the home.

Only by breaking one of three promises: pay your property taxes, keep homeowners insurance, and keep the house livable. Do those three things and keep living there, and the home cannot be taken from you. That is federal law.

Your family picks one of three paths: keep the house by paying the loan balance or 95 percent of its value, whichever is less; sell it and keep everything above the balance; or walk away owing nothing at all. They can never inherit debt from this loan, and they get about 6 to 12 months to decide. The full guide for your family is here.

Yes. They inherit it like any house with a mortgage on it. If they want to keep it, they pay off the balance (or 95 percent of the home's value if the balance grew bigger than that). If they would rather have the money, they sell and keep what remains.

If you are both on the loan, the survivor keeps living in the home with nothing changing. If one spouse is under 62, the loan can still be made with that spouse protected as an eligible non-borrowing spouse who can stay for life. This must be set up correctly at the start, so raise it in the very first conversation.

Away more than 12 months in a row and the loan comes due; the home is usually sold, the loan repaid, and the remaining equity is yours to fund your care. Short stays like rehab after surgery change nothing. And if your spouse on the loan still lives at home, nothing happens at all.

Yes, whenever you like. Escrow pays the loan off from the sale, you keep the rest. No penalty, no lock-in.

The balance grows instead of shrinking, because interest is added rather than paid monthly. That means less equity for your family later. The upfront costs are real too. You are trading some of tomorrow's inheritance for cash flow and security now. For some families that is exactly right; for others it is not.

Good fit: you plan to stay in your home for years, you want your mortgage payment gone, or you need monthly income or a safety net. Bad fit: you may move within a few years, or leaving the house itself to your children is your top priority. The required counseling session is an honest place to work through it, because the counselor earns nothing from your answer.

A HELOC is cheaper upfront but demands monthly payments and can be frozen by the bank. A reverse mortgage costs more upfront but never requires a payment, and its credit line cannot be frozen and grows over time. If monthly payments are easy for you, price a HELOC first. If the whole point is ending payments, that is what a reverse mortgage is for.

A HELOC, refinancing, selling and downsizing, California's property tax postponement program for seniors, or help from family. A good counselor covers all of them. Anyone who refuses to discuss alternatives is a salesman, not an advisor.

Fees and interest, the same way they earn on any mortgage. It is a normal, heavily regulated loan product, not a trick. The FHA insurance is what keeps it honest: the government guarantees you can never owe more than the home is worth.

Four rules. Never buy an annuity or investment from anyone involved in your loan (California law says it cannot be required). Verify every lender's NMLS number at NMLS Consumer Access. Distrust anyone who rushes you, because California requires a 7-day cooling-off period after counseling. And keep your family in the loop from day one. All your California protections are here.

Yes, exactly as you do now. That is your side of the deal, and it is the one rule that matters. If money for taxes is tight, the loan can include a reserve that pays them automatically for you.

Condos: yes if the building is FHA-approved, and many in Southern California are; single-unit approvals are often possible otherwise. Still owing on your mortgage: yes, that is the most common case. The reverse mortgage pays off your old loan first, which ends that monthly payment forever, and the remainder comes to you.

The standard program counts value up to $1,249,125 in 2026 no matter what your home is worth. Above that, jumbo reverse mortgages count your full home value with loan amounts up to $4 million, charge no FHA insurance, and can start at age 55 in California. They are not FHA-insured, so protections come from the contract; compare both in writing before choosing. Full jumbo guide here.