Mark Boeck, Arizona Reverse Mortgage Lender

A reverse mortgage is a loan secured by your home. The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM). Eligible homeowners can convert part of their home equity into loan proceeds while retaining title to the home. Monthly principal-and-interest payments are generally not required while the loan terms are met, but interest and fees are added to the balance over time.

For an FHA-insured HECM, borrowers must generally be at least 62, occupy the property as their principal residence, have sufficient equity, complete HUD-approved counseling and demonstrate the ability to meet ongoing property charges. Existing liens normally must be paid at closing. A lender must review your complete circumstances before confirming eligibility.

Yes. You stay on title and keep living in the home as your primary residence while you access part of your equity. No monthly principal and interest payment is required, but property taxes, homeowners insurance, maintenance and occupancy requirements continue.

Reverse mortgage proceeds may be used to pay off an eligible existing mortgage at closing. Afterward, required monthly principal-and-interest payments are generally eliminated while the loan remains in good standing. You must still pay property taxes, homeowners insurance, applicable HOA or flood-insurance charges, and maintain the home.

Depending on the loan and your eligibility, proceeds can come as a line of credit, monthly advances, a lump sum or a combination of these. Each choice affects costs and how the loan balance grows, so compare them against your near term needs and long term retirement goals.

Proceeds can help with everyday spending, healthcare, home repairs, unexpected expenses or a reserve for future needs, and many Arizona homeowners use them to improve monthly cash flow. The right structure depends on your goals, your available equity and how much equity you want to keep.

HECM costs can include an origination charge, appraisal and other closing costs, FHA mortgage-insurance premiums, interest and possible servicing fees. Some costs may be financed from the loan proceeds, which reduces the amount available to you. Your lender and HUD-approved counselor should explain the itemized costs and alternatives before you decide.

You continue to own the home and must occupy it as your principal residence, pay property taxes and homeowners insurance on time, keep the property in good condition and meet the other requirements in your loan documents. Failure to meet these obligations can cause the loan to become due and payable.

The loan generally becomes due when the last borrower sells the home, permanently moves away or dies. It may also become due if loan obligations are not met, for example if required property charges are unpaid or the home is not maintained. Specific protections and timelines depend on the loan, borrower and any eligible non-borrowing spouse.

A co-borrower can generally remain in the home after the other borrower dies if the loan obligations continue to be met. Some eligible non-borrowing spouses may also qualify for protections. When the loan is due, heirs can typically repay or refinance the amount due, sell the home and retain any remaining equity, or work with the servicer on other available options. Discuss family and estate plans before closing.

Sometimes. If you have enough equity and meet the eligibility rules, a reverse mortgage may pay off the existing loan, but timing matters and it is not right for every situation. Ask Mark to review your options early, and speak with a HUD approved housing counselor about other options as well.

Start with a personalized review of your goals, property and existing mortgage. HECM applicants must complete independent counseling with a HUD-approved counselor. The lender then provides disclosures, orders an appraisal and completes financial and property underwriting before a final decision and closing. You should compare alternatives and ask questions at every stage.