Reverse Mortgages and Aging in Place: How They Work
A reverse mortgage lets homeowners 62 and older turn part of their home equity into cash without a required monthly mortgage payment. The loan comes due when the last borrower moves out, sells or passes away. It can help you stay in your home, but it has costs and responsibilities you should understand first.
Reverse Mortgages and Aging in Place: How They Work
How a reverse mortgage works for homeowners 62 and older, what it costs, what stays your responsibility, and how it fits an aging-in-place plan.
How does a reverse mortgage work?
You keep the title to your home. The lender pays you, as a lump sum, a line of credit or monthly payments, depending on the program. Interest and fees are added to the balance over time, so the loan balance grows and your equity generally shrinks.
The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM). There are also proprietary programs for other situations.
What are the basic requirements?
• You’re 62 or older.
• The home is your primary residence.
• You have enough equity.
• You complete required counseling with an approved counselor before applying.
• You can keep paying property taxes, homeowners insurance and maintenance.
That last item matters. No required monthly mortgage payment doesn’t mean no housing costs.
When is it repaid?
When the last borrower sells, moves out for an extended period or passes away. Heirs can typically keep the home by paying off the loan, sell it and keep any remaining equity, or hand it over. HECMs are non-recourse, so the amount owed generally won’t exceed the home’s value.
How can it help you age in place?
Some homeowners use the proceeds for home modifications, in-home care, to pay off an existing mortgage or to supplement retirement income. Ask how a line of credit compares with a lump sum.
What are the tradeoffs?
• Upfront costs and mortgage insurance
• Growing loan balance and shrinking equity
• Ongoing responsibility for taxes, insurance and upkeep
• Less to leave to heirs
What should you compare it with?
A HELOC, downsizing, a cash-out refinance or simply using other savings. A reverse mortgage isn’t the right answer for everyone, and I’ll tell you if it isn’t yours.
How do you start?
Talk with a family member or advisor you trust, then with me. We’ll walk through your numbers, and you’ll complete the required counseling before you decide anything.
Thinking about staying in your home? Talk to us
General information only. Reverse mortgage requirements and costs vary by program. [CONFIRM which programs APM offers.] Not a commitment to lend.
Mike Belfor, Branch Manager and Mortgage Loan Originator, American Pacific Mortgage, NMLS 264700 (Company NMLS 1850). Equal Housing Opportunity. Updated September 18, 2026.
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