Your Questions, Answered.

A reverse mortgage is a home loan available to homeowners age 62 and older that allows you to convert part of your home’s equity into funds you can use however you choose — without selling your home or making monthly mortgage payments. The loan balance grows over time as interest accrues and is repaid when you permanently leave the home, sell the property, or pass away.

Both allow you to access your home equity, but they work differently. A home equity loan requires monthly repayments starting immediately. A reverse mortgage requires no monthly payments — repayment is deferred until you leave the home. A reverse mortgage is also specifically designed for homeowners 62 and older, with eligibility tied to age and equity rather than income and credit score.

The most common type — the Home Equity Conversion Mortgage (HECM) — is insured by the FHA, a federal agency. That insurance protects both the borrower and the lender. However, a reverse mortgage is not a government benefit or grant. It is a loan. The government’s role is to insure and regulate it, not to fund it.

Yes. There are no restrictions on how reverse mortgage proceeds are used. Homeowners commonly use them to eliminate existing mortgage payments, supplement retirement income, cover medical or long-term care costs, make home improvements, or build a financial safety net. The decision is entirely yours.

The loan becomes due when you permanently leave the home — whether by passing away, selling, or relocating to a long-term care facility. At that point, the loan is typically repaid through the sale of the home. Any equity remaining after repayment goes to you or your heirs. If the home sells for less than the loan balance, FHA insurance covers the difference — neither you nor your heirs owe the shortfall.

To qualify for an HECM, you must be age 62 or older, own the home, live in it as your primary residence, have sufficient equity, and be able to continue paying property taxes, homeowners insurance, and HOA dues. The property must also meet FHA standards — most single-family homes qualify.

Yes. As long as one borrower meets the age requirement, you can proceed. However, the loan terms — including the proceeds available — are calculated based on the age of the youngest borrower on the title. Jeff can walk through exactly what that means for your specific situation.

Credit requirements for a reverse mortgage are significantly less strict than for a conventional home loan. Your credit and income will be reviewed, but the primary purpose is to confirm you can continue meeting your property obligations — not to qualify you for a rate. Many seniors who wouldn’t qualify for a traditional refinance are eligible for a HECM.

No. If you have an existing mortgage, it must be paid off at closing using your reverse mortgage proceeds. Any amount remaining after that payoff is yours to use freely. Many homeowners use a reverse mortgage specifically to eliminate an existing mortgage payment.

Most single-family homes qualify. Properties with up to four units also qualify, provided one unit is the borrower’s primary residence. Condominiums may qualify if they are FHA-approved. Manufactured homes must meet FHA standards. Vacation homes and investment properties do not qualify.

The amount depends on your age, your home’s appraised value, your existing mortgage balance, and current interest rates. The older you are and the more equity you have, the more you can generally access. Our calculator gives you a starting estimate — and Jeff can provide a personalized figure during a free consultation.

You have several options: a lump sum (fixed interest rate), monthly payments, a line of credit, or a combination. Each option has different implications for how your proceeds grow and how you access them over time. The line of credit option is particularly useful for retirement planning — unused funds grow at the same rate as the loan interest.

Reverse mortgage proceeds are loan funds, not income — so they are generally not subject to income tax. However, tax situations vary. We recommend verifying current tax implications with your accountant before proceeding.

No. Reverse mortgage proceeds do not affect Social Security or Medicare benefits. Medicaid and other income-based benefit programs may be affected if loan proceeds are held in a bank account and push your assets above program thresholds. Jeff can walk through the specifics for your situation.

Costs typically include an origination fee, FHA mortgage insurance premium, an appraisal fee, closing costs, and servicing fees. Most of these can be rolled into the loan rather than paid out of pocket at closing. Jeff will provide a full cost breakdown during your consultation — before any paperwork is signed.

Your heirs retain any equity remaining after the loan is repaid. When the loan becomes due, heirs have 12 months to decide: sell the home and keep the remaining equity, refinance the reverse mortgage into a traditional loan, or pay off the balance through other means. They are never personally liable for any shortfall.

Yes — and we actively encourage it. Citizens Reverse Mortgage has always recommended that family members attend consultations. Better decisions happen when everyone who matters to the outcome is in the room. Consultations are available in person, by phone, or by video to accommodate family members who live outside Orange County.

If the home is no longer your parent’s primary residence for more than 12 consecutive months, the loan becomes due. The estate would need to sell the home or arrange another form of repayment at that point. This scenario is one of the most important to consider before proceeding — and Jeff addresses it directly in every family consultation.

Yes. Federal law provides a three-day right of rescission after closing — your parent can cancel the loan within three business days of signing, with no penalty and no questions asked.