Question 1

What is HECM?

Accepted Answer

HECM stands for Home Equity Conversion Mortgage, the FHA-insured reverse mortgage program that accounts for the vast majority of reverse mortgages made in the United States.

Question 2

Who qualifies for a reverse mortgage?

Accepted Answer

You must be at least 62, occupy the home as your primary residence, have significant equity, meet FHA property standards, and complete independent HUD counseling.

Question 3

Can a couple both be on the loan?

Accepted Answer

Yes. As long as at least one borrower is 62+, both can be on the loan. Special protections exist for non-borrowing spouses under 62.

Question 4

How much can I borrow?

Accepted Answer

It depends on the youngest borrower's age, current interest rates, and your home value up to the FHA lending limit. Jumbo (proprietary) programs are available above the limit.

Question 5

Does it affect my Social Security or Medicare?

Accepted Answer

No. Reverse mortgage proceeds are loan proceeds, not income. Medicaid and other need-based programs have different rules, always consult a specialist.

Question 6

Do I still own my home?

Accepted Answer

Yes. You hold title. The lender only has a lien, exactly like any other mortgage.

Question 7

Are property taxes and insurance still my responsibility?

Accepted Answer

Yes. This is one of the most important requirements, failure to pay taxes or insurance can trigger loan default.

Question 8

Can the lender kick me out?

Accepted Answer

Not as long as you meet the loan requirements, occupy the home as primary residence, pay taxes and insurance, and maintain the property.

Question 9

What happens if I need to move to assisted living?

Accepted Answer

If you're away from the home for more than 12 months, the loan becomes due. Your family can sell the home to satisfy the loan.

Question 10

What happens when I pass away?

Accepted Answer

Heirs have up to a year to sell the home, refinance to keep it, or walk away with no personal obligation.

Question 11

Can I refinance my current mortgage into a reverse mortgage?

Accepted Answer

Yes, this is one of the most common uses. The HECM pays off your existing mortgage and eliminates the monthly payment.

Question 12

Can I buy a home with a reverse mortgage?

Accepted Answer

Yes, through the HECM for Purchase program. You put down 45–60% and the reverse mortgage covers the rest, with no monthly payment.

Question 13

How does a reverse mortgage compare to a HELOC?

Accepted Answer

A HELOC requires monthly payments and can be frozen by the bank. A HECM has no required monthly payment, cannot be canceled, and the unused line grows over time.

Question 14

How does it compare to a cash-out refinance?

Accepted Answer

A cash-out refi creates a new monthly payment; a reverse mortgage doesn't. Cash-out is generally better if you have strong income; reverse is better for income preservation.

Question 15

How does it compare to downsizing?

Accepted Answer

Downsizing pulls out equity but requires moving and closing costs. A reverse mortgage lets you stay put. Many families do a combination via HECM for Purchase.

Question 16

What are typical closing costs?

Accepted Answer

Origination fee, FHA mortgage insurance premium, appraisal, title, counseling, and standard third-party costs. Most can be financed into the loan.

Question 17

Is counseling really required?

Accepted Answer

Yes. You must meet with an independent HUD-approved counselor. It's typically a 60–90 minute session and costs around $125.

Question 18

What is the growing line of credit feature?

Accepted Answer

The unused portion of your HECM line of credit grows at the loan's rate over time, potentially giving you access to more funds later than you have today.

Question 19

Are reverse mortgage proceeds taxable?

Accepted Answer

Generally no, because they're loan proceeds. Consult your CPA for your specific situation.

Question 20

Does the interest ever get deducted?

Accepted Answer

Interest on a reverse mortgage may be deductible when it's actually paid, often at loan payoff, subject to IRS rules. Consult your CPA.

Question 21

What if my home value drops?

Accepted Answer

The non-recourse feature protects you. You'll never owe more than the home is worth at repayment.

Question 22

Can I do a reverse mortgage on a condo?

Accepted Answer

Yes, if the condo project is FHA-approved. Brian can check any Bloomington-area condo project for you.

Question 23

What about a manufactured home?

Accepted Answer

Possible in some cases, subject to specific FHA property requirements.

Question 24

Should I get a reverse mortgage?

Accepted Answer

It depends on your goals, your other retirement assets, and how long you plan to stay in the home. That's exactly the conversation Brian is trained to have, no pressure, no pitch.

Question 25

How do I get started?

Accepted Answer

Schedule a complimentary 30-minute conversation with Brian. If a HECM isn't the right fit, he'll tell you.

Every reverse mortgage question, answered.

Complete FAQ

A conversation with Brian is educational, unhurried, and never salesy.