How a reverse mortgage (HECM) works
A Home Equity Conversion Mortgage is a reverse mortgage insured by the Federal Housing Administration. It lets homeowners aged 62 and older turn part of their home equity into cash, without monthly mortgage payments, while they continue to live in the home.
Who it's for
- Homeowners 62 or older
- Owners who plan to stay in their home
- Families planning together for later life
What you'll typically need
- At least one borrower aged 62 or older
- The home as your primary residence
- Counselling with a HUD-approved counsellor
- Ability to keep paying taxes, insurance and upkeep
Guidelines vary by lender and change over time. A licensed loan officer confirms what applies to you.
The good
- No required monthly mortgage payment
- Several ways to receive funds
- Non-recourse protection for heirs
Trade-offs to know
- Interest and mortgage insurance add to the balance over time
- Less equity left for heirs
- Upfront costs can be significant
Step by step
- 01Information conversation
- 02Counselling session
- 03Application and appraisal
- 04Underwriting
- 05Closing and a short waiting period
Other programs
Home Equity Conversion Mortgage (HECM)HECM for PurchaseFor families
On a real site each program gets its own page like this one.
Talk it through with Morgan Pell
Questions are free. So is a first look at your numbers.
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