Every Reverse Mortgage Question, Answered Straight
These are the questions people actually ask about reverse mortgages, answered in plain English. The short version: a reverse mortgage is an FHA-insured loan for homeowners 62 and older that pays you from your home's equity with no monthly mortgage payments. You keep the title, the loan is repaid when you leave the home, and neither you nor your heirs can ever owe more than the home is worth.
The Basics
What is a reverse mortgage, in simple terms?
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.
How does it work?
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.
Who qualifies?
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.
What is a HECM? Is that different?
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.
How long does it take?
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 Money
How much money would I get?
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.
Is the money taxable?
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.
Will it affect my Social Security or Medicare?
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.
What does it cost? What are the fees?
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.
What is the interest rate?
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.
Can I pay it back early if I want to?
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.
Your House and Your Family
Does the bank own my house?
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.
Can I lose my house?
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.
What happens when I die?
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.
Can my kids still inherit the house?
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.
What if my husband or wife is younger than 62, or dies before me?
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.
What if I need to move into assisted living?
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.
Can I sell the house later if I change my mind?
Yes, whenever you like. Escrow pays the loan off from the sale, you keep the rest. No penalty, no lock-in.
Judgment Calls
What is the downside? Be honest.
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.
Is a reverse mortgage a good idea for me?
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.
Reverse mortgage or home equity line of credit (HELOC)?
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.
What are my alternatives?
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.
Why do banks even offer this? What is in it for them?
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.
Safety and Fine Print
How do I avoid scams?
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.
Do I still pay property taxes and insurance?
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.
Can I get one on a condo? What about owing money still?
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.
My home is worth way more than the FHA limit. Now what?
The standard program counts value up to $1,249,125 in 2026 no matter what your home is worth. Above that, private jumbo reverse mortgages exist and can reach much higher. They are not FHA-insured, so protections differ; compare both in writing before choosing.
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