What is a Reverse Mortgage?
A Reverse Mortgage is a type of home loan that allows homeowners who are aged 62 or older to convert some of their home equity into cash without having to sell or move out of their home. Instead of making monthly payments to a lender, the lender makes payments to the borrower based on the equity in the home. The loan is then repaid after the homeowner moves out of the home, sells the home, or passes away.
Understand HECM Eligibility
A Home Equity Conversion Mortgage (HECM) is an FHA-insured reverse mortgage for borrowers age 62 or older. The home must be the principal residence, and the lender reviews equity and other program requirements. A younger spouse may have a different status as an eligible non-borrowing spouse; that is not the same as being a co-borrower.
Ongoing Responsibilities Still Apply
HECM borrowers generally do not make monthly principal-and-interest payments, but must keep up with property taxes, insurance, required property charges and home maintenance. Failing to meet loan obligations can result in foreclosure.
Understand the Costs and Repayment
Interest and fees are added to the balance, reducing remaining equity over time. The loan generally becomes due when the home is sold or no borrower lives there, subject to applicable borrower and spouse protections. Review costs, repayment events and alternatives with a HUD-approved reverse-mortgage counselor before deciding.
Discuss Your Situation
Ask a TGBMC home loan advisor, call (469) 351-1081, or start your secure application.
An inquiry is not a loan approval or rate lock. Use the secure application process for financial documents.
Official resource: Learn more about this program.
