Reverse Mortgages, in Plain Answers
These are the questions families ask us most, answered straight. For more, read Debunking Reverse Mortgage Myths.
What is a reverse mortgage?
It is a home loan for homeowners 62 and older that turns part of the home's equity into money you can use. You can take it as a lump sum, a monthly amount, a line of credit, or to pay off a mortgage you already have. No monthly mortgage payment is required. You still pay property taxes, homeowners insurance and upkeep.
Do I give up my home with a reverse mortgage?
No. You keep the title and you still own the home. The lender holds a lien on it, the same way any mortgage does, and you can sell the home whenever you choose.
When does a reverse mortgage have to be paid back?
It comes due when the last borrower sells the home, moves out for good, or passes away. Living somewhere else, such as a care facility, for more than 12 months in a row counts as moving out. The loan can also come due if the property taxes or insurance aren't paid or the home isn't kept up.
What happens to the house for my children or heirs?
They choose. They can sell the home, pay off the loan and keep what's left. They can keep the home by paying off the loan. Or they can hand the home to the lender. With the federally insured version, heirs never owe more than the home is worth, and the loan can't be collected from their other assets. Deadlines apply, so they should contact the loan servicer early.
Does the amount I owe grow over time?
Yes. Because you aren't making monthly payments, interest and mortgage insurance are added to the balance each month. The amount owed grows and the equity left in the home shrinks. That trade is the heart of the decision, and it's why we talk it through with the whole family.
What does a reverse mortgage cost?
There are upfront costs, including mortgage insurance, an origination fee and regular closing costs, plus interest and mortgage insurance over time. Most of these can be paid from the loan instead of out of pocket. A loan estimate spells out every cost before you decide, and you can compare quotes from more than one lender.
What if my spouse is younger than 62?
A younger spouse can't be a borrower yet, but may qualify as an eligible non-borrowing spouse and keep living in the home after the borrower passes away, if certain conditions are met. This has to be set up when the loan is made, so bring it up at the start.
Is counseling required?
Yes. Before you apply for a federally insured reverse mortgage, you meet with an independent counselor approved by HUD, the U.S. Department of Housing and Urban Development. The counselor doesn't work for the lender. Family members are welcome to join.
Can a reverse mortgage help me buy a different home?
Yes. A reverse mortgage for purchase lets homeowners 62 and older buy a home that fits better, like a single-story home closer to family, with a large down payment and no monthly mortgage payment afterward. Taxes, insurance and upkeep still apply.
Should my adult children be part of this?
We hope so. Most families decide together, and it goes better when everyone hears the same answers at the same time. Invite them to the walk-through or the call, in person or by phone.
What Does Aging in Place Mean?
Aging in place means living in your own home safely and comfortably as you get older, instead of moving because the house stopped working. Most of the time, it comes down to a few things: getting in and out, one-floor living, a safe bathroom, good light, and someone close by.
What Changes Help Most?
- The bathroom. Grab bars, a shower seat, a handheld shower head, or a walk-in shower.
- Steps and entries. A second railing, a ramp, or one step-free way into the house.
- Light. Brighter bulbs, switches at both ends of halls, and night lights on the way to the bathroom.
- Floors. No loose rugs, cords tucked away, and clear paths through each room.
- Main-floor living. A bedroom, a full bath and the laundry on one level.
A walk-through shows which of these matter in your home, and who in the Sacramento area does the work well.
How Do Families Pay for It?
Savings cover the small changes. Bigger projects are often paid with a home equity line of credit, a reverse mortgage, or, for eligible veterans with a service-connected disability, VA home adaptation grants. Each one has trade-offs, and the right answer depends on the person and the plan.
As a mortgage broker, Maggie compares options across a network of approved lenders, so you see real choices instead of one bank's menu. Get a quote from us and compare it. You're always free to use your own lender.
When Is Moving the Better Call?
Sometimes the house can't be made to work, or the changes would cost more than they give back. Then the question becomes where to go next and how to get there without the stress. That's what we do every day. See downsizing with Surroundings, and if you're 55 or older and buying again, read about Prop 19 in Sacramento.
Stay or go, you get one plan, and the decision stays yours.
Talk It Through With Maggie
We offer a free walk-through of the house, in person, with you and anyone in the family you want there. You get a short list of what to change, plain answers on reverse mortgages, and no pressure to do anything.
Call or text Maggie at (916) 549-3131, or send us a message.
This page is general information, not legal, tax, medical or lending advice, and not a home inspection. Reverse mortgage information on this page is general and is not a loan offer, an approval or a commitment to lend. Borrowers must be 62 or older, live in the home as their main residence, and keep paying property taxes, homeowners insurance and upkeep, or the loan can come due. Interest and fees are added to the balance over time. Counseling with a HUD-approved counselor is required before applying for a federally insured reverse mortgage. Loans arranged by Maggie B. Hopkins, NMLS #349517, at Surroundings, NMLS #2528307. All loans are subject to credit approval and underwriting.