Reverse mortgage benefits & guidelines
Unlock the power of your home’s equity to create a reliable source of cash right when you need it most with a reverse mortgage or government-backed home equity conversion mortgage (HECM). Instead of you making monthly mortgage payments*, these mortgages can provide you funds through regular payments, a flexible line of credit** or even a one-time lump sum. A reverse mortgage offers flexibility, freedom and peace of mind. Connect with a reverse mortgage expert today to get started.
Why choose a reverse mortgage?
In a traditional mortgage, you pay the lender. With an HECM or reverse mortgage, the lender pays you based on the equity in your home to help cover living expenses, medical costs or other needs without monthly mortgage payments and while allowing you to enjoy the lifestyle you’ve worked hard to achieve.
Reverse mortgage guidelines
To qualify for a reverse mortgage, you will need:
- Minimum 62 years old
- 60% equity in your home
- Independent counseling to understand loan details
You will need to use your FHA-approved primary residence as collateral. Applicants must also complete an education session to ensure they fully understand their decision.
How to calculate my reverse mortgage?
It's simple with our Reverse Mortgage Calculator. By just plugging in an estimate of your home value, the age of the youngest borrower and your property type, our calculator will give you an idea of how much you could receive from your reverse mortgage. Start the reverse mortgage process with a few easy clicks.
How to apply for a reverse mortgage
Applying for a reverse mortgage or HECM is a straightforward process, but it’s important to understand each step to ensure a smooth experience. Follow these steps.
1. Education
A licensed Loan Officer will assess your needs and help you explore how a reverse mortgage or HECM can work for your situation.
1. Education
A licensed Loan Officer will assess your needs and help you explore how a reverse mortgage or HECM can work for your situation.
2. Counseling
Before moving forward, you’ll complete an independent counseling session to fully understand your financial decision and its implications.
3. Application
Your loan officer will guide you through the application process, ensuring you have all the necessary documents ready to submit.
4. Appraisal
An appraisal will be conducted to confirm your home’s value and ensure it meets livability requirements.
5. Closing
Once everything is in place, you’ll review and sign the final documents to complete the process.
“The Guaranteed Rate Team was very easy to work with! Information was clear and all available through my portal for review at all times. Additionally the team was very responsive to any and all questions we had along the way.”
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.
*This is not a commitment to lend. The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the borrower does not meet these loan obligations, then the loan will need to be repaid. Otherwise, the loan must be repaid when the last borrower passes away or sells the home. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states. Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision. This material has not been reviewed, approved or issued by HUD, FHA or any government agency. Rate, Inc. is not affiliated with or acting on behalf of or at the direction of HUD, FHA or any other government agency. To find a HECM Mortgage counselor near you, search the HECM Counselor Roster at https://entp.hud.gov/idapp/html/hecm_agency_look.cfm or call (800) 569-4287.
**If part of your loan is held in a line of credit upon which you may draw, then the unused portion of the line of credit will grow in size each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on your loan.
When the loan is due and payable, some or all of the equity in the property that is the subject of the HECM mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. The lender may charge an origination fee, mortgage insurance premium, closing costs and servicing fees (added to the balance of the loan). The balance of the loan grows over time and the lender charges interest on the balance. Borrowers are responsible for paying property taxes, homeowner’s insurance, maintenance, and related taxes (which may be substantial). We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable (and the property may be subject to a tax lien, other encumbrance, or foreclosure) when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms. Interest is not tax-deductible until the loan is partially or fully repaid.