Understanding Reverse Mortgages: Your Complete Guide
For homeowners 62 and older who want to unlock their home equity without selling or making monthly payments.
What Is a Reverse Mortgage?
A reverse mortgage is a loan that lets you turn the equity you’ve built in your home into cash you can use today. Unlike a traditional “forward” mortgage, you don’t make monthly payments to the bank. Instead, the loan is repaid when you no longer live in the home — whether you sell, move, or pass away.
You keep the title to your home. You stay in control. As long as you live in the home as your primary residence and meet the loan terms (such as paying property taxes and insurance), you can stay for life.
In short: with a forward mortgage, you pay the bank every month. With a reverse mortgage, the bank pays you — from your own equity — in the way you choose.
Who Qualifies?
Eligibility is straightforward. Here’s what’s required:
Age 62 or older
The youngest borrower on the loan (or an eligible non-borrowing spouse) must be at least 62.
Primary residence
The home must be your main residence, not a vacation or rental property.
Sufficient equity
You need enough equity to cover existing liens and closing costs. Our calculator can show you the numbers.
HUD-approved counseling
Independent counseling is required before closing. It’s there to protect you and ensure you understand your options.
Financial assessment
Lenders assess your ability to pay property taxes, insurance, and maintenance. This protects you from default.
How You Can Receive Your Funds
You choose how to receive your proceeds. Many people use a combination.
Lump sum
A one-time disbursement. Available with fixed-rate loans. Useful for paying off an existing mortgage or a large expense.
Monthly tenure payments
You receive equal monthly payments for as long as you live in the home. This can supplement retirement income predictably.
Monthly term payments
Equal monthly payments for a set period you choose (for example, 10 years). After that, payments stop but you keep the home.
Line of credit (with growth)
You draw only what you need, when you need it. The unused portion grows over time at a rate tied to the loan — so your available credit can increase even if you don’t borrow more. Many people use this as a financial safety net.
Combination
You can mix any of the above — for example, a line of credit plus monthly payments. Your counselor and loan officer help you decide what fits your situation.
Line of credit growth is a standout feature of HECM lines of credit: the amount you can draw grows over time, even if you don’t take more money out. It’s like having a reserve that gets larger — something many retirees value for peace of mind.
Common Concerns Addressed
We hear these questions often. Here are honest answers.
Will I lose my home?
No — as long as you live in the home as your primary residence and meet the loan terms (paying property taxes, insurance, and keeping the property in good repair), you can stay. The loan becomes due when you no longer live there, such as when you sell, move, or pass away.
What do my heirs get?
Your heirs have options. They can pay off the loan and keep the home, or sell the home and keep any equity left after the loan is repaid. FHA insurance means they will never owe more than the home is worth — even if the loan balance exceeds the value.
Is this a government scam?
No. Reverse mortgages are FHA-insured and regulated by HUD. They require independent HUD-approved counseling before you close. The program has been around for decades and is designed to help older homeowners use their equity safely.
What about the costs?
There are closing costs (origination fee, FHA mortgage insurance, appraisal, title, etc.), similar in spirit to a traditional mortgage. Your loan officer can give you a breakdown. Many people find that the benefit of no monthly payments and access to equity outweighs the upfront cost, especially if they plan to stay in the home for several years.
Is a Reverse Mortgage Right for You?
It’s a good fit for some situations and less ideal for others. Here’s a quick guide.
A reverse mortgage may be a good fit if you:
- Plan to stay in your home long-term
- Want to eliminate or reduce monthly mortgage payments
- Want a financial safety net or growing line of credit
- Want to supplement retirement income
- Have sufficient equity and are 62 or older
It may not be ideal if you:
- •Plan to move in the next few years
- •Want to leave the home completely debt-free to heirs
- •Have very low equity (our calculator can show your numbers)
Use our calculator to see how much you might access based on your age, home value, and current mortgage. Then, when you’re ready, reach out for a personalized conversation.
Use our calculator to see your numbersHear From Jerry Garcia
A short explainer from Jerry on reverse mortgages and how he helps homeowners.
Why Work With Jerry Garcia
Jerry Garcia is a licensed Mortgage Loan Originator who specializes in reverse mortgages. He works with Colorado homeowners 62 and older — and through partnerships, can assist clients in other states — to help them understand their options and access their home equity with clarity and confidence.
- NMLS #994639
- Colorado License #100041939
- Edge Home Finance Corporation, NMLS #891464
Equal Housing OpportunityFHA-InsuredHUD-ApprovedTestimonials from homeowners and families will go here. Jerry focuses on education and clarity — no pressure, just clear information so you can decide what’s right for you.
Ready to see if a reverse mortgage makes sense for you?
Schedule a call with Jerry. Free, no-obligation consultation.