A Reverse Mortgage is a financial tool - a loan - available only to homeowners 62 and older, that allows access to equity in your principal residence which you may have thought was previously inaccessible.  You ALWAYS retain title to your home and share no appreciation with the lender.  

With a Reverse Mortgage, no repayment of principal or interest is required while living in the home.  Instead, interest is added to the loan and paid when the house is sold or after the you move from the home.  This creates the cash flow often needed to successfully “Age in Place” - remain in your home safely and securely for as long as you wish.

With today’s constantly changing market, Reverse Mortgages are one of the few options available to seniors who want to remain in their homes, need access to equity but may not qualify for an equity line.

Reverse Mortgages were previously available in two families – those loans backed by the US Government and “proprietary” loans offered by lenders and targeted at higher value properties.

“Previously” is the operative word term.  “Proprietary” mortgages are no longer available – most disappeared in 2007 and 2008.  With more monies available under the government-backed program, it is unknown if or when proprietary Reverse Mortgages may return to the marketplace.

Currrently, Reverse Mortgages are available under the Home Equity Conversion Mortgage (HECM) program.  This program is backed by the US Department of Housing and Urban Development (HUD) and is insured by the Federal Housing Administration.

In January 2009 the HECM program was expanded to allow eligible borrowers to purchase a new principal residence using a combination of proceeds from a Reverse Mortgage and cash from their pockets.  This program – known as HECM for Purchase - made it possible for homeowners to downsize from Mega-Mansion to Cozy-Cottage, or relocate to other geographical areas to be closer to family members.

HECM Reverse Mortgages, whether for equity redemption or purchase, operate under the same HUD guidelines.

Within the HECM offering, there are two families of Reverse Mortgages:  1) those based upon an adjustable interest rate and 2) those based upon a fixed interest rate.  To determine which one may be right for you, there are many considerations include your age, the amount of money you may need to access, the value of your property, your risk tolerance, and more.