Whether seeking money to finance a home improvement, pay off a current mortgage, supplement retirement income, or pay for healthcare expenses, many older Americans are turning to "reverse" mortgages. Reverse mortgages allow older homeowners to convert part of the equity in their homes into cash without having to sell their homes or take on additional monthly bills.
In a "regular" mortgage, monthly payments are made to the lender. But in a "reverse" mortgage, money is received from the lender and not paid back for as long as the home is occupied by the borrower(s). Instead, the loan is repaid when the last surviving homeowner no longer occupies the property as a primary residence either through death or relocation. Reverse mortgages can help homeowners who are house-rich but cash-poor stay in their homes and still meet their financial obligations.
To qualify for most reverse mortgages, the youngest borrower must be at least 62 and live in the home. The proceeds of a reverse mortgage (without other features, like an annuity) are tax-free, and reverse mortgages have no income restrictions.
| Program | Type | Rate Adjustments | MIP* | Payment Options |
| HECM MONTHLY |
ADJUSTABLE | MONTHLY | YES | Lump Sum, Line of Credit, Tenure, Term or Combination |
| HECM
ANNUAL |
ADJUSTABLE | ANNUALLY | YES | Lump Sum, Line of Credit, Tenure, Term or Combination |
| HECM FIXED |
FIXED | NEVER | YES | Lump Sum, Line of Credit, Tenure, Term or Combination |
| JUMBO
FIXED |
FIXED | NEVER | NO | LUMP SUM |
| JUMBO ADJUSTABLE |
ADJUSTABLE | NEVER | NO | LUMP SUM |
* Mortgage Insurance Premium
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