Homeowners

What Older Homeowners Need to Know About Reverse Mortgages

Older homeowners may want to consider a reverse mortgage if they need cash.

These loans, also called Home Equity Conversion Mortgages (HECMs), can help homeowners who are 62 and up tap into the equity they have in their properties. They can use that money for vacations, to buy new properties, for medical and living expenses, and just about anything else.

Reverse loans can only be used for primary residences. You must have at least 50% equity in your property, if you don’t own the property outright.

The money must be repaid once the homeowner moves, sells the property, or passes away.

Heirs can still inherit homes with reverse mortgages. However, they will need to either pay off the balance or sell the home. If they choose to sell, they can keep the profits minus the debt.