This guide cuts through everything. No jargon, no vague language, no fine print buried in paragraph eight. By the time you finish reading, you’ll know exactly what a reverse mortgage is, whether you might qualify, and what questions to ask before you move forward.

What Is a Reverse Mortgage? (The Simple Version)

A regular mortgage works like this: you borrow money from a bank to buy a home, and you make monthly payments until the loan is paid off.

A reverse mortgage works the opposite way: you already own the home (or most of it). The bank pays you — based on how much equity you’ve built. You don’t make monthly mortgage payments. The loan balance grows over time and is paid back when you sell the home, move out, or pass away.

That’s it. You spent decades building equity in your home. A reverse mortgage lets that equity work for you in retirement.

Who Qualifies for a Reverse Mortgage?

You must be 62 years of age or older. If you have a co-borrower, both borrowers must be at least 62.

The home must be your primary residence. Vacation homes and investment properties do not qualify.

You must have sufficient equity. Most lenders require you to own the home outright or have a low remaining balance. The reverse mortgage will pay off any remaining conventional mortgage at closing.

You must be able to maintain the property. This means staying current on property taxes, homeowner’s insurance, and basic maintenance.

You must complete HUD-approved counseling. This is a federal requirement — and a good one. The counseling session is independent and designed to make sure you fully understand the product before committing.

How Much Money Can You Get?

The amount you can borrow depends on three things: your age or the age of your co-borrower, the amount that your home appraised for, and the current interest rate. Unfortunately the interest rates fluctuate. 

Generally, older borrowers with higher home values and lower interest rates receive more money. You will not receive 100 percent of your home’s value — the lender retains a portion to ensure the loan is repaid when the home eventually sells.

For a California homeowner with significant equity, the proceeds can be substantial — often enough to eliminate a remaining mortgage, clear debts, fund home modifications, or provide supplemental income for years.

How Can You Receive the Money?

Lump sum: a single payment at closing. Best for paying off a mortgage, clearing debt, or funding a major one-time expense.

Monthly payments (tenure): a fixed monthly payment for as long as you live in the home. Functions like a paycheck from your home equity.

Line of credit: a pool of money you draw from as needed. The unused credit grows over time — a valuable feature for planning ahead.

Combination: many borrowers take a smaller lump sum at closing and set up a line of credit for future use.

There is no ‘right’ option. The best structure depends on your specific situation — which is exactly what we help you figure out.

What You Keep — and What You’re Responsible For

You keep: the title to your home, the right to live there indefinitely (as long as it’s your primary residence), and any equity that remains above the loan balance when the home is sold.

Your heirs keep: the right to pay off the loan balance and inherit the home, or sell the home and receive any equity above the loan balance.

You are responsible for: property taxes, homeowner’s insurance, and maintaining the property. These are not optional. If these obligations are not met, the loan can become due.

What you are protected from: you can never owe more than the home is worth. The HECM’s non-recourse guarantee means that even if your loan balance eventually exceeds your home’s value, you or your heirs are not personally liable for the difference. The FHA insurance covers the gap.

Common Fears — and the Truth

“The bank will own my home.” False. You retain the title and full ownership of your home.

“My kids will lose their inheritance.” Not necessarily. Any equity remaining above the loan balance belongs to your heirs.

“I could be forced out of my home.” Only if you fail to meet the loan obligations — specifically, property taxes, insurance, or primary residence requirements. As long as you maintain those, you have the right to stay.

“Reverse mortgages are only for people who are desperate.” Many financially comfortable seniors use reverse mortgages as a strategic retirement planning tool — not as a last resort.

“I’ll outlive the loan.” A HECM cannot be called due simply because you live longer than expected. The loan is not due until you permanently leave the home.

Frequently Asked Questions

What is a HECM? Home Equity Conversion Mortgage — the federally insured reverse mortgage program. The most common type in the United States.

Can I get a reverse mortgage if I still have a mortgage? Yes. The reverse mortgage pays off your existing mortgage first. Many people do this specifically to eliminate their monthly payment.

Does a reverse mortgage affect Social Security or Medicare? Generally no. Consult an advisor if you receive Medicaid or SSI, as those programs have asset rules that may apply.

How long does the process take? Typically 30 to 45 days from application to closing.

What if I change my mind? You have a mandatory three-day right of rescission after closing — a federal protection that allows you to cancel without penalty.