Reverse mortgage FAQ: answers to the most common questions
July 24, 2026
A reverse mortgage can feel like a foreign concept, even for homeowners who have spent decades paying off a traditional mortgage. The product flips the usual arrangement: instead of paying the lender each month, the lender pays the homeowner. Because the structure is unusual, it tends to generate a lot of questions. Here are the answers to the ones that come up most often.
A reverse mortgage is a loan secured by the home, designed for homeowners age 62 and older. The borrower does not make monthly mortgage payments. Instead, the loan balance grows over time as interest and fees are added, and the homeowner continues to live in the property. The most common version is the Home Equity Conversion Mortgage, or HECM, which is insured by the federal government. To qualify, the homeowner must own the home outright or have a small remaining balance, live in the property as a primary residence, and complete a mandatory counseling session with a HUD-approved agency.
The money can be received in several ways: a lump sum, a line of credit that grows over time, monthly payments, or a combination of those options. The homeowner retains title to the property and remains responsible for property taxes, homeowners insurance, and upkeep. Falling behind on those obligations can put the loan at risk, so lenders review the borrower's ability to keep up with them before closing. There are also upfront costs, including an origination fee, closing costs, and a mortgage insurance premium, which is why the required counseling session exists: to make sure the borrower understands the full picture.
The loan becomes due when the last borrower passes away, moves out, or sells the home. At that point, the borrower or the heirs can repay the loan balance, which includes the principal plus accumulated interest and fees, or sell the home to satisfy the debt. If the sale price exceeds what is owed, the remaining equity goes to the borrower or the heirs. Heirs are never personally liable for more than the home is worth, and they are given time to decide what to do. A reverse mortgage does not affect Social Security or Medicare, though it can influence needs-based programs like Medicaid depending on how the funds are received and held.
A reverse mortgage is not the right fit for every homeowner, but for the right situation it can provide meaningful flexibility in retirement. The best way to know whether it makes sense is to talk through the specifics with someone who can walk through the numbers and the long-term implications.