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Reverse Mortgage

For homeowners who have spent decades paying down a mortgage, a good portion of their savings is sitting in the house itself. A reverse mortgage is one way eligible homeowners age 62 or older can access part of that equity while continuing to live in the home — though it comes with real obligations worth understanding carefully before deciding.

What Is A Reverse Mortgage?

A reverse mortgage is a loan option available to eligible homeowners age 62 or older that allows them to convert a portion of their home equity into available funds while continuing to live in their home.

Depending on the program, proceeds may be received as a lump sum, monthly payments, a line of credit, or a combination of these options. Borrowers remain responsible for meeting loan obligations, including paying property taxes, homeowners insurance, maintaining the home, and occupying it as their primary residence.

It's a significant decision, and not the right fit for everyone. That's part of why HUD-approved counseling is required before closing — so you have an independent conversation about the trade-offs before anything is signed.

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Who Reverse Mortgages May Be Right For

A reverse mortgage may be a good fit for homeowners who want to access a portion of their home equity as part of their retirement planning while continuing to live in their home.

This option may be worth exploring if you:

  • Are age 62 or older
  • Have built significant equity in your home
  • Plan to remain in your home as your primary residence
  • Want to supplement retirement income or improve cash flow
  • Are looking for greater financial flexibility during retirement
  • Want to learn whether a reverse mortgage fits your long-term financial goals

General Qualification Guidelines

Every homeowner's situation is different. Your age, the equity you've built, and your overall financial picture all factor into whether this is an appropriate option. An ALCOVA loan officer can help review those details with you. Eligible borrowers must also complete HUD-approved counseling before obtaining a reverse mortgage.

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Benefits and Considerations of a Reverse Mortgage

This is a product where the considerations deserve as much attention as the benefits. Both are listed below, and we'd encourage you to read them together — along with anyone else who has a stake in the decision.
  • Access a portion of your home's equity without selling your home
  • Multiple payment options may be available
  • No required monthly mortgage payments while loan obligations are met*
  • Continue living in your home as your primary residence
  • Funds may be used for a variety of personal financial needs
  • Borrowers must continue paying property taxes, homeowners insurance, and maintain the home
  • The loan balance increases over time as interest and fees accrue
  • Home equity available to heirs may be reduced
  • The loan generally becomes due when the borrower no longer occupies the home as their primary residence or does not meet loan obligations
  • HUD-approved counseling is required before closing
*Borrowers remain responsible for property taxes, homeowners insurance, home maintenance, and other loan obligations.

When a Reverse Mortgage Makes Sense

Many homeowners find it helpful to include family members in the conversation, particularly because the equity available to heirs may be reduced. This is a decision to spend some time with and also might be worth considering when:
  • You want to access a portion of your home's equity without selling your home
  • You're looking for additional financial flexibility during retirement
  • You plan to remain in your home for the foreseeable future
  • You want to supplement retirement income or create a line of credit
  • You're exploring strategies to help manage retirement expenses
  • You want to better understand the options available to you as a homeowner
At ALCOVA, our goal is to help you understand whether a reverse mortgage supports your bigger financial picture—not just today, but throughout your retirement years.
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Reverse Mortgage vs. Home Equity Loan vs. Cash-Out Refinance

There is more than one way to access the equity in your home, and they work quite differently. Here's how the three most common options compare.
Feature Reverse Mortgage Home Equity Loan Cash-Out Refinance
Primary Purpose Access home equity during retirement Borrow against home equity Replace existing mortgage and access equity
Age Requirement 62+ (most programs) None None
Monthly Mortgage Payments Generally not required while loan obligations are met* Required Required
Primary Residence Required Yes Usually Usually
Common Uses Retirement planning, supplemental income, financial flexibility Home improvements, debt consolidation, major expenses Home improvements, debt consolidation, major expenses

*Borrowers must continue to meet all loan obligations, including paying property taxes, homeowners insurance, maintaining the home, and occupying it as their primary residence.

Understanding Your Options Comes First

A reverse mortgage isn't the right answer for every homeowner, and knowing that going in is part of a good conversation. If you're weighing it against a home equity loan, a cash-out refinance, or simply staying put, it's worth talking through all of it.
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Frequently Asked Questions About Bank-Statement Loans

Generally, homeowners who are age 62 or older, occupy the home as their primary residence, and meet program requirements may be eligible.

Yes. You retain ownership of your home as long as you continue to meet the loan obligations.

Generally, no monthly mortgage payments are required while you continue to occupy the home as your primary residence and meet the loan obligations.

Yes. Your heirs may choose to repay the loan balance, sell the home, or pursue other options available under the loan program.

There are generally no restrictions on how loan proceeds are used. Many homeowners use them for retirement expenses, healthcare costs, home improvements, or other financial goals.

The best way to know is to review your retirement goals, home equity, and financial situation with a loan professional who can help you understand your options.
A reverse mortgage is a complex financial product. Borrowers must meet all program eligibility requirements, including completing HUD-approved counseling. Borrowers remain responsible for property taxes, homeowners insurance, home maintenance, and occupying the home as their primary residence. Loan programs are subject to approval and applicable guidelines.
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