Equity and specialty
Reverse mortgage
A Home Equity Conversion Mortgage is a serious financial decision with real trade-offs. We explain both sides plainly, and we have told plenty of families it was not right for them.
How the reverse mortgage works
A reverse mortgage, formally a Home Equity Conversion Mortgage, lets homeowners 62 and older draw on equity without making a monthly principal and interest payment. The balance grows over time and is repaid when the home is sold or the last borrower permanently leaves.
You still own the home, and you are still responsible for property taxes, homeowners insurance and maintenance. Falling behind on any of those can trigger a default, which is the single most important thing to understand before signing.
HUD requires independent counseling from an approved agency before an application can proceed. We think that is a good rule and we will not start a file without it. Talk to your family and your financial advisor too.
What you get with us
Not program features. The things our office does on every file of this type.
HUD counseling first
Independent, third-party counseling is required and we will not skip it.
Family conversation invited
We encourage adult children to join the consultation. Surprises later are worse for everyone.
Payout option comparison
Lump sum, monthly tenure payments, line of credit or a combination, modeled side by side.
Obligation checklist
A written summary of the taxes, insurance and upkeep you remain responsible for.
Non-recourse explanation
Neither you nor your heirs will owe more than the home is worth at repayment.
Alternatives reviewed honestly
Downsizing, a HELOC or a standard refinance are compared before we recommend a HECM.
Step by step
Six stages, and what each one actually asks of you.
Education session
A conversation with no application and no pressure. Bring whoever you want.
HUD counseling
You meet with an independent approved counselor and receive a certificate.
Application
Financial assessment reviews your ability to keep paying taxes and insurance.
Appraisal
An FHA appraisal establishes value and any required repairs.
Underwriting
Reviewed against HECM guidelines, including any set-aside for taxes and insurance.
Closing
Sign, wait out the rescission period, then funds are available in the form you chose.
Why people choose it
No monthly payment
Principal and interest are deferred until the home is sold or vacated.
You keep the title
Ownership does not transfer to the lender.
Non-recourse protection
Repayment never exceeds the home's value at the time it is sold.
Flexible payout
Take a line of credit, monthly income, a lump sum, or a mix.
What moves your pricing
Six levers underwriting actually looks at. Two of them you can change before you apply.
| Factor | How it affects you |
|---|---|
| Youngest borrower age | Older borrowers qualify for a larger share of the equity. |
| Home value | Subject to the FHA lending limit for HECM loans. |
| Current balance | Any existing mortgage must be paid off from the proceeds. |
| Interest rate | Affects the principal limit available to you. |
| Financial assessment | Income and credit history are reviewed for tax and insurance capacity. |
| Required repairs | The appraisal may require repairs before or shortly after closing. |
Programs people compare this with
- Home equity line of creditA revolving line against your equity that leaves your first mortgage exactly where it is.Compare
- Cash-out refinanceReplace your mortgage with a larger one and take the difference in cash at closing.Compare
- Rate and term refinanceReplace your current loan with a better rate, a shorter term, or both. No cash out.Compare
Questions about this program
Not for failing to make a mortgage payment, because there is none. You can default by failing to pay property taxes or homeowners insurance, or by failing to occupy the home as your primary residence. Those obligations remain yours.
When the loan becomes due, your heirs can sell the home and keep any remaining equity, or pay off the balance and keep the house. They will never owe more than the home is worth.
It is one tool among several. For some households with heavy equity and thin income it is genuinely the right answer. For others, downsizing or a HELOC is better. We compare all three before recommending anything.
HUD-approved agencies charge a modest fee, and some waive it based on income. It is independent of us by design.
Magnolia Lending Group
Ready to look at a reverse mortgage?
A pre-approval takes about four minutes to start and one business day to issue. No cost and no obligation.
Free consultation. Sample rates and assistance amounts shown on this site are illustrations, not offers.