Home equity and retirement
A reverse mortgage can provide access to home equity, but it is still a loan with costs and responsibilities. Understanding those terms is the first step toward deciding whether it fits your plans.
What is a reverse mortgage?
A reverse mortgage lets eligible homeowners borrow against the equity in their home. The most common type is a Home Equity Conversion Mortgage (HECM), insured by the Federal Housing Administration.
With a HECM, you keep title to your home and generally do not make monthly principal-and-interest payments. Interest and fees are added to the balance, so the amount owed can grow while your remaining equity falls. The loan is generally repaid when the borrower no longer lives in the home, subject to the loan terms and applicable protections.
Who may qualify for a HECM?
- Borrowers must be at least 62 years old.
- The home must be your principal residence.
- You must own the home outright or have sufficient equity.
- You must complete counseling with a HUD-approved reverse mortgage counseling agency.
- The lender assesses your ability to meet ongoing property obligations, and the home must meet program requirements.
Private reverse mortgage programs have different requirements. Ask which type of loan is being discussed rather than assuming every program follows HECM rules.
How can the money be received?
Depending on the loan, proceeds may be available as a lump sum, periodic payments, a line of credit, or a combination. The available amount and payment choices depend on factors such as the program, your age, interest rate and home value. An existing mortgage generally must be paid off at closing, which reduces the proceeds available to you.
What expenses remain?
A reverse mortgage does not eliminate the costs of owning your home. You must continue paying property taxes and homeowners insurance, maintain the home and satisfy occupancy requirements. Association dues and other applicable property charges may also remain your responsibility.
Failure to meet loan obligations can cause the loan to become due and may lead to foreclosure. Discuss how you will pay these expenses throughout retirement.
What does it cost?
Costs can include origination and closing fees, interest, servicing charges and, for a HECM, mortgage insurance. Financing upfront costs reduces the money available from the loan and adds to the balance. Compare written estimates and consider how costs accumulate over the time you expect to keep the loan.
Can a reverse mortgage help buy a home?
A HECM for Purchase may help an eligible borrower buy a principal residence. You must bring funds to cover the difference between the loan proceeds and the purchase price plus closing costs. It is not a zero-down-payment purchase program.
Questions to discuss before deciding
- How long do I expect to remain in the home?
- Can I afford ongoing property expenses?
- What happens if I move, sell, or need long-term care?
- How are a spouse, other occupants and heirs affected?
- What will I owe over time, and how much equity may remain?
- Would downsizing or another financing option better meet my goals?
An independent HUD-approved counselor can help you compare alternatives and understand the financial implications.
Talk with Sorci Home Solutions
Speak with Travis Sorci about the available options and the questions you should ask. Call 407-234-1679 or contact our team.
Discuss reverse mortgage options
Official resources
- CFPB: How reverse mortgages work (opens in a new tab)
- CFPB: Eligibility and counseling (opens in a new tab)
- CFPB: Loan costs (opens in a new tab)
- HUD: HECM and HECM for Purchase (opens in a new tab)
Content updated October 6, 2026. This guide provides general education. Eligibility, costs and available programs depend on the lender and your circumstances.