Reverse Mortgages
Reverse mortgages unlock the equity in your home while you continue living there
A reverse mortgage works differently than a traditional home loan. Instead of making monthly payments to a lender, the lender makes payments to you, using your home's equity as the source. You retain ownership and remain responsible for property taxes, insurance, and maintenance. When you move, sell, or pass away, the loan is repaid from the sale proceeds or your estate. This can be a powerful tool for homeowners 62 and older who want to access their home's value while staying in their home. The funds can be used for any purpose—healthcare costs, home improvements, paying off existing debts, or simply enhancing your retirement income. There are no restrictions on how you use the money.
Flexibility built into every product
Reverse mortgages come in several structures, each designed to serve different financial situations and preferences. The right choice depends on your needs, your home's value, and how you want to access your equity.
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Home Equity Conversion Mortgage (HECM)
This federally-insured product is the most common reverse mortgage. It offers flexibility in how you receive funds—as a lump sum, monthly payments, a line of credit, or a combination. You maintain the title to your home and control when and how you tap your equity.
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Fixed-Rate Reverse Mortgage
If you prefer stability and want to receive all funds at closing as a single lump sum, a fixed-rate product may suit you. This straightforward approach works well for those with specific financial needs they want to address immediately.
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Adjustable-Rate Reverse Mortgage
This option provides more frequent access to your equity through a line of credit that grows over time. It's designed for those who want flexibility to draw funds as needs arise rather than receiving everything upfront.
Understanding reverse mortgages
Reverse mortgages have specific rules and features that differ from traditional lending. These answers address the most common questions we hear.
Am I required to repay a reverse mortgage while I'm still living in my home?
No. With a reverse mortgage, there are no monthly mortgage payments while you occupy the home as your primary residence. The loan is repaid when you move away, sell the property, or pass away. At that time, the sale proceeds or your estate will be used to settle the loan balance.
Will I lose my home if I can't pay property taxes or insurance?
Yes, you remain responsible for property taxes, homeowners insurance, and home maintenance. If these obligations aren't met, it could trigger loan maturity. This is why it's important to ensure you have the means to cover these ongoing costs before taking out a reverse mortgage.
How much of my home's equity can I access?
The amount depends on your age, the current interest rate, and your home's value. Generally, younger borrowers and those with lower-value homes can access a smaller percentage of equity. Your lender will calculate your specific amount based on these factors.
What happens to my heirs if I have a reverse mortgage?
When you pass away, your heirs can keep the home by paying off the loan, typically through refinancing or a sale. If the home sells for more than the loan balance, your heirs receive the difference. If it sells for less, the insured reverse mortgage typically covers the shortfall—your heirs don't owe the difference.
Does a reverse mortgage affect my government benefits?
Generally, reverse mortgage proceeds don't affect Social Security or Medicare. However, they may impact need-based programs like Medicaid or Supplemental Security Income. Consult with a financial advisor or benefits specialist to understand how a reverse mortgage might affect your specific situation.
What are the upfront costs of a reverse mortgage?
Reverse mortgages involve closing costs similar to traditional mortgages, plus mortgage insurance premiums. These can be substantial and are usually added to your loan balance rather than paid upfront. We'll provide a detailed estimate so you understand all costs before committing.
Stories from homeowners we've helped
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I have had the pleasure of doing business with McGowin-King Mortgage over the years. My fourth loan was just as easy and efficiently handled as the first one. Would highly recommend MKM.
Al Schlosser -
John McCabe and the team at McGowin-King Mortgage did an excellent job on our mortgage. We purchased a foreclosure and went with a very rare HUD incentive loan. They took this complicated process and got it done for us within our alloted contract terms. We couldn't be happier with our experience!!
Elizabeth Bazzel -
Working with McGowin-King made the process of buying our first home very smooth. Their team was responsive and supportive throughout, and I would definitely recommend them to anyone looking for a personalized home-buying experience.
Tyler Jones -
We are so glad we chose McGowin-King to help us with our first home buying experience. We had the pleasure of working with John McCabe. We had a lot of questions and John was readily available to answer them, even during odd hours. We won't ever hesitate to recommend this firm to our friends, family and co-workers. Thanks again!
Clinton Freyeisen