Reverse mortgages: a clear-eyed look for homeowners 62 and up
August 4, 2026
A reverse mortgage isn't a last resort or a desperate move. For the right homeowner, it's a tool that converts part of your home's equity into cash or a line of credit while you keep living there. The catch is that "right homeowner" matters a lot, and so does understanding what you're trading away. Let's walk through how these loans actually work in plain English.
A reverse mortgage, most commonly the HECM insured by the federal government, is available to homeowners 62 and older who own their home outright or have a small remaining balance. Instead of making monthly payments to a lender, the lender pays you, through a lump sum, a monthly tenure, a line of credit, or some combination. The loan balance grows over time because interest and fees are added to what you owe, and repayment happens when the last borrower sells the home, moves out permanently, or passes away. You retain title and continue to own the home the entire time. You're still responsible for property taxes, insurance, and upkeep, and if those slip, the loan can come due.
The most common version, the HECM, requires a counseling session with a HUD-approved agency before you can close. That session isn't a formality; it's where an independent counselor walks through your specific numbers, alternatives, and the long-term cost of the loan. Fees typically include an origination charge, mortgage insurance premiums, and closing costs, which is why the line of credit option often appeals to borrowers who want flexibility without paying everything upfront. The credit line also has a feature most people don't expect: the unused portion grows over time at the same rate as the loan balance, which can give you a larger pool to draw from later. None of this is free, and the loan will reduce the equity your heirs eventually receive.
So who actually benefits? Homeowners who plan to stay in the home long term, have substantial equity, and need to stretch retirement income or cover rising costs without taking on a new monthly payment. It's also a tool for a surviving spouse who wants to remain in the family home after a partner passes, or for someone who wants to delay drawing Social Security to maximize future benefits. It's usually a poor fit for someone planning to move within a few years, someone with little equity, or anyone counting on leaving the home at full value to heirs. The right answer depends on your timeline, your other assets, and what you actually need the money to do.
A reverse mortgage is a real financial product with real costs, and it deserves the same careful look you'd give any major decision. If you're 62 or older and weighing one, the best first step is the required counseling session and a candid conversation with a loan officer who'll lay out the numbers without pressure.