What Is a Reverse Mortgage?
The most common reverse mortgage is the FHA-insured Home Equity Conversion Mortgage (HECM). It allows homeowners age 62 or older to convert part of their home equity into funds without selling the home or making monthly principal and interest payments.
You keep title to your home. The loan balance grows over time and generally becomes due when the last borrower permanently moves out, sells the home, or passes away. At that point, the home is usually sold to repay the loan, and any remaining equity belongs to you or your heirs. Because a HECM is a non-recourse loan, you or your heirs will never owe more than the home is worth when it's sold.
Funds can be received as a lump sum, monthly payments, a line of credit that can grow over time, or a combination. Many retirees use a reverse mortgage to pay off an existing mortgage, cover healthcare costs, supplement retirement income, or make home modifications to age in place.
HECM for Purchase
Looking to downsize or move closer to family? A HECM for Purchase lets you buy a new primary residence using a reverse mortgage plus a down payment โ with no monthly mortgage payment afterward.
*Important: Borrowers must continue to live in the home as their primary residence, pay property taxes, homeowners insurance, and any HOA dues, and maintain the home. Failure to meet these obligations can cause the loan to become due. HUD-approved counseling is required before applying. A reverse mortgage is not right for everyone โ Earnest will help you weigh the pros and cons honestly.