How Does a Reverse Mortgage Work?

What Is a Reverse Mortgage

A reverse mortgage is a specialized home loan that allows homeowners aged 62 and older to convert a portion of their home equity into cash without having to sell their home, give up the title, or make monthly mortgage payments. The name "reverse" comes from the fact that instead of the borrower making payments to the lender each month (as with a traditional or "forward" mortgage), the lender makes payments to the borrower. The loan balance increases over time rather than decreasing, which is the opposite of how a conventional mortgage works.

The concept behind a reverse mortgage is straightforward: many older Americans are house-rich but cash-poor. According to the National Council on Aging, housing wealth represents the single largest asset for most Americans over 62, with a median home equity of approximately $250,000. Yet many of these same homeowners struggle with daily expenses, healthcare costs, or simply maintaining an adequate quality of life in retirement. A reverse mortgage allows them to access this locked-up wealth while continuing to live in their home for as long as they choose.

The most common type of reverse mortgage in the United States is the Home Equity Conversion Mortgage, or HECM (pronounced "heck-um"), which is insured by the Federal Housing Administration (FHA) and regulated by the U.S. Department of Housing and Urban Development (HUD). HECMs account for approximately 95% of all reverse mortgages originated in the country. Because they are government-insured, HECMs come with specific borrower protections, including caps on fees, mandatory counseling requirements, and the critical non-recourse feature that prevents borrowers from ever owing more than their home's value.

In addition to HECMs, there are proprietary (also called "jumbo") reverse mortgages offered by private lenders for homeowners with high-value properties that exceed the HECM lending limit, which is $1,209,750 as of 2026. These proprietary products are not FHA-insured, which means they may lack some of the consumer protections built into the HECM program, but they can provide access to larger amounts of equity. A third type, the single-purpose reverse mortgage, is offered by some state and local government agencies and nonprofit organizations for specific purposes such as home repairs or property tax payments. These are the least common and typically the least expensive option.

It is crucial to understand that with a reverse mortgage, you retain full ownership of your home. The lender does not take title to your property. You remain responsible for all the obligations of homeownership, including property taxes, homeowners insurance, any homeowners association (HOA) fees, and routine maintenance. Failing to meet these obligations can trigger a default on the reverse mortgage, potentially leading to foreclosure despite the fact that no monthly mortgage payments are required.

How HECM Reverse Mortgages Work

The mechanics of a HECM reverse mortgage differ fundamentally from a traditional mortgage, and understanding these differences is essential for anyone considering this financial tool. While a conventional mortgage involves borrowing a sum of money and gradually paying it down over time, a HECM works in the opposite direction: you start with little or no loan balance, and it grows over the life of the loan.

When you close on a HECM, the lender establishes a pool of funds that you can access based on your home's appraised value, your age, and current interest rates. If you have an existing mortgage on the property, the HECM must first pay off that balance. This is a mandatory use of proceeds and happens automatically at closing. Any remaining funds after the payoff become available to you through the payment method you select. For example, if your home is appraised at $400,000 and you qualify for $200,000 in total proceeds, but you still owe $80,000 on your existing mortgage, the HECM pays off that $80,000 first, leaving you with $120,000 in available funds (minus closing costs).

Interest on a HECM accrues on the outstanding loan balance and is added to that balance each month rather than being paid out of pocket. This means the amount you owe grows over time through a process sometimes described as "negative amortization." For instance, if you receive a $100,000 lump sum at a 6.5% interest rate, after one year your balance would grow to approximately $106,500 even if you make no additional draws. After five years, the balance would be approximately $138,000. After ten years, it would approach $190,000. This compounding effect is one of the most important aspects of reverse mortgages for borrowers and their families to understand, as it steadily consumes home equity over time.

The HECM becomes due and payable when a "maturity event" occurs. The most common maturity events are the death of the last surviving borrower, the sale of the home, or the borrower permanently moving out of the property (defined as being absent for more than 12 consecutive months). When the loan becomes due, the borrower or their heirs typically have several options: sell the home and use the proceeds to repay the loan, pay off the loan from other funds and keep the home, or execute a deed in lieu of foreclosure if the loan balance exceeds the home's value.

A critical protection built into the HECM program is the non-recourse clause. This means that when the loan becomes due, the repayment obligation is limited to the lesser of the loan balance or 95% of the home's current appraised value. If the home has declined in value and the loan balance exceeds what the home is worth, neither the borrower nor their heirs are responsible for the difference. The FHA's Mutual Mortgage Insurance Fund absorbs the loss. This protection ensures that a reverse mortgage cannot create a debt that follows the borrower or their family beyond the value of the property. You can explore how traditional mortgage payments work in comparison using our amortization schedule calculator.

Eligibility Requirements for a Reverse Mortgage

Not everyone qualifies for a HECM reverse mortgage. The program has specific eligibility criteria designed to ensure that borrowers can meet their ongoing obligations and that the loan serves their best interests. Understanding these requirements before beginning the application process saves time and helps you determine whether a reverse mortgage is a realistic option for your situation.

The most fundamental requirement is age: at least one borrower on the loan must be 62 years old or older at the time of closing. If you are married and both spouses are on the title, the younger spouse's age will be used to calculate the loan amount, which typically results in lower proceeds because the lender expects the loan to last longer. Spouses under 62 can be listed as "eligible non-borrowing spouses," which provides certain protections allowing them to remain in the home after the borrowing spouse passes away, though they cannot access additional loan proceeds.

You must either own your home outright or have a substantial amount of equity, typically at least 50% of the home's value. If you have an existing mortgage, the HECM proceeds must be sufficient to pay it off at closing. There is no strict equity requirement specified by HUD, but in practice, the combination of your age, home value, and current interest rates must generate enough proceeds to satisfy any existing liens on the property.

The property itself must meet certain standards. It must be your primary residence, meaning you live there for the majority of the year. Eligible property types include single-family homes, two-to-four unit properties (where the borrower occupies one unit), HUD-approved condominiums, and manufactured homes that meet FHA requirements. Investment properties, vacation homes, and most co-ops are not eligible. The property must also meet FHA minimum property standards, and any required repairs identified during the appraisal must be completed before or shortly after closing.

Financial assessment is another key component of HECM eligibility. Since 2015, lenders have been required to conduct a financial assessment of all HECM applicants to evaluate their willingness and capacity to meet ongoing property obligations. This assessment examines your credit history (looking for patterns of delinquent payments or defaults), your income and assets, and your history of paying property taxes and homeowners insurance. While there is no minimum credit score for a HECM, a poor credit history or insufficient residual income could result in the lender requiring a Life Expectancy Set-Aside (LESA), which is a portion of your loan proceeds set aside specifically to cover future property tax and insurance payments.

Before you can apply for a HECM, you are required to complete a counseling session with a HUD-approved reverse mortgage counselor. This counseling can be conducted in person or by telephone and typically takes 60 to 90 minutes. The counselor will explain how reverse mortgages work, discuss the costs and implications, review alternatives, and ensure you understand your obligations. The counselor works independently of the lender and is there to protect your interests. You will receive a counseling certificate upon completion, which is required to proceed with your loan application. A list of HUD-approved counseling agencies is available at HUD.gov.

How Much Money Can You Get

The amount of money available through a HECM reverse mortgage is determined by a formula called the principal limit, which takes into account three primary factors: your age (or the age of the youngest borrower if there are multiple borrowers), the current interest rate, and the appraised value of your home (or the HECM lending limit, whichever is lower). The interaction of these variables determines what percentage of your home's value you can access.

Age has a direct relationship with the principal limit: older borrowers qualify for a higher percentage of their home's value than younger borrowers. This is because the lender expects the loan to be outstanding for a shorter period with an older borrower, reducing the total interest that will accrue. As a general guideline, a 62-year-old borrower might qualify for roughly 40% to 50% of their home's value, while an 80-year-old might qualify for 55% to 65%. These percentages are approximate and vary based on current interest rates.

Interest rates work inversely: lower rates increase the principal limit, while higher rates decrease it. This is because lower rates mean less interest will compound over the life of the loan, allowing the lender to extend a larger initial amount. The difference can be significant. In a low-rate environment with rates around 4%, a 72-year-old with a $400,000 home might qualify for $220,000 in gross proceeds. At rates of 7%, that same borrower might qualify for only $170,000. This relationship underscores why the timing of a reverse mortgage application can meaningfully affect the available proceeds. Check current rates to understand the prevailing rate environment.

The appraised value of your home establishes the upper boundary of the calculation, subject to the HECM lending limit. For 2026, the FHA lending limit for HECMs is $1,209,750. If your home is appraised at $800,000, the calculation uses $800,000. If your home is appraised at $2,000,000, the calculation uses the $1,209,750 cap. Homeowners with properties exceeding this limit may want to explore proprietary reverse mortgages that are not bound by FHA limits, though these products typically come with higher costs and fewer consumer protections.

From the gross principal limit, several mandatory deductions are made before you receive your net proceeds. These include the upfront mortgage insurance premium (currently 2% of the appraised value or lending limit, whichever is lower), origination fees, closing costs, and the payoff of any existing mortgage or lien on the property. What remains is your net principal limit, which is the actual amount available to you. For a 72-year-old with a $400,000 home, no existing mortgage, and a gross principal limit of $200,000, the net proceeds after estimated fees might be approximately $180,000 to $188,000.

It is also important to know that if you choose the adjustable-rate HECM option, you must wait 12 months after closing before you can draw more than 60% of the initial principal limit. This rule, implemented in 2013, was designed to prevent borrowers from withdrawing all their equity at once, which had led to financial difficulties for some early reverse mortgage borrowers. The 60% rule does not apply if you need more than 60% to pay off an existing mortgage or other mandatory obligations at closing. The fixed-rate HECM, by contrast, requires a full lump-sum draw at closing, giving you no flexibility to access funds over time.

Payment Options: Lump Sum, Line, Tenure, Term

One of the most significant decisions a HECM borrower makes is how to receive their funds. The adjustable-rate HECM offers five different payment options, each suited to different financial needs and strategies. The fixed-rate HECM offers only one option. Understanding the trade-offs between these choices is essential for maximizing the value of a reverse mortgage.

Lump Sum

The lump sum option delivers all available proceeds to you at closing in a single payment. This is the only option available with a fixed-rate HECM. While it provides immediate access to the maximum amount of cash, it also means interest begins accruing on the full balance from day one, causing the loan balance to grow as quickly as possible. The lump sum is best suited for borrowers who have a specific, immediate need for a large amount of cash, such as paying off an existing mortgage or funding a major home modification for aging in place. It is generally not recommended for borrowers who simply want to supplement their monthly income, as the rapid interest accumulation erodes equity unnecessarily.

Line of Credit

The line of credit option establishes a pool of funds that you can draw from whenever you need money, in whatever amounts you choose. You only pay interest on the amount you have actually drawn, not on the undrawn balance. Perhaps the most attractive feature of the HECM line of credit is its growth rate: the unused portion of the credit line grows over time at the same rate as the loan's interest rate plus the annual mortgage insurance premium. This means your available credit increases even if your home's value remains flat or declines. Over a decade, this growth can significantly increase the total funds available to you. Financial planners often recommend the line of credit as the most versatile option, particularly as a reserve fund for unexpected expenses in retirement.

Tenure Payments

Tenure payments provide equal monthly payments to the borrower for as long as at least one borrower continues to live in the home as their primary residence. This option functions somewhat like a pension or annuity, providing a predictable income stream that cannot run out regardless of how long you live. The monthly amount is calculated using actuarial tables based on the borrower's age and the available proceeds. While tenure payments provide the ultimate certainty of income, the monthly amount is typically lower than what you might receive with a term payment plan, because the lender must account for the possibility of a very long payout period.

Term Payments

Term payments deliver equal monthly payments for a fixed period that you select, such as 10, 15, or 20 years. Because the payment period is limited, the monthly amount is higher than what you would receive under a tenure plan. Term payments are well suited for borrowers who need to bridge a specific gap, such as the period between retirement and the start of Social Security benefits, or between early retirement and Medicare eligibility at age 65. However, once the term expires, the payments stop, and you receive no further funds even though the loan balance continues to grow.

Modified Plans

HECM borrowers can also choose combination plans that blend the above options. A modified tenure plan combines a line of credit with monthly tenure payments (smaller monthly payments than a pure tenure plan, but with a credit line available for additional needs). A modified term plan combines a line of credit with monthly term payments. These hybrid arrangements provide both regular income and a financial cushion for unexpected expenses, offering a balance of predictability and flexibility that many retirees find appealing. You can also change your payment plan after closing, though switching from a fixed-rate lump sum HECM to another option is not possible.

Reverse Mortgage Costs and Fees

Reverse mortgages are among the most expensive loan products available, and understanding the full cost structure is essential for making an informed decision. The fees associated with a HECM can significantly reduce the net proceeds available to the borrower, making it important to weigh these costs against the benefits.

The upfront mortgage insurance premium (MIP) is one of the largest costs. For all HECMs, the initial MIP is 2% of the home's appraised value or the HECM lending limit, whichever is lower. On a $400,000 home, this amounts to $8,000. This premium is charged regardless of the payment option you choose or how much of your equity you ultimately access. The upfront MIP can be financed into the loan balance rather than paid out of pocket, but this means it immediately begins accruing interest.

In addition to the upfront premium, HECMs charge an annual MIP of 0.5% of the outstanding loan balance. This annual premium is calculated monthly and added to the loan balance. As your balance grows, so does the annual insurance premium, creating a compounding effect. Over a 10-year period, the cumulative annual MIP on a balance that starts at $150,000 and grows at 6.5% interest could add over $15,000 to the total loan cost.

Origination fees compensate the lender for processing the loan. FHA caps these fees based on the home's value: $2,500 for homes valued at $125,000 or less; for homes valued above $125,000, the fee is 2% of the first $200,000 of value plus 1% of the value above $200,000, with a maximum of $6,000. For a $400,000 home, the origination fee would be $6,000 (2% of $200,000 = $4,000 plus 1% of $200,000 = $2,000). Some lenders may charge less than the maximum or waive the origination fee entirely to attract business, so shopping around is worthwhile.

Standard closing costs for a HECM are similar to those for a conventional mortgage and typically include appraisal fees ($400 to $700), title search and title insurance ($500 to $1,500), recording fees, survey costs, and various other third-party charges. Total closing costs exclusive of origination fees and MIP generally range from $2,000 to $5,000 depending on location and property type.

Servicing fees are monthly charges assessed by the loan servicer for administering the HECM. These fees are typically $30 to $35 per month for adjustable-rate HECMs and $25 per month for fixed-rate HECMs. Like other HECM costs, servicing fees are added to the loan balance rather than paid out of pocket. While individually small, over a 15-year period these fees can add up to $5,000 to $6,000 before accounting for accumulated interest.

When evaluating the total cost of a reverse mortgage, it is helpful to think in terms of the total annual loan cost (TALC), which expresses all costs as an annualized percentage rate similar to an APR. Lenders are required to provide the TALC rate in their disclosures. A shorter holding period results in a higher TALC because the upfront costs are spread over fewer years. For borrowers who remain in their home for only a few years, the TALC can be prohibitively high, making a reverse mortgage a poor financial choice. For long-term occupants, the TALC decreases as the upfront costs are amortized over more years. Use our mortgage calculator to compare the long-term costs of different borrowing options.

What Happens When the Borrower Dies

What happens to a reverse mortgage after the borrower's death is one of the most common concerns among potential borrowers and their families. The process is governed by federal regulations and the terms of the HECM agreement, and understanding the timeline and options available to heirs can prevent confusion and financial stress during an already difficult time.

When the last surviving borrower on a HECM passes away, the loan becomes due and payable. The servicer will send a notice to the estate or known heirs informing them that the loan must be resolved. Under current regulations, heirs are given 30 days from the date of the notice to indicate their intentions and up to six months to complete the transaction. Extensions of up to two additional 90-day periods may be granted if the heirs are actively working to sell the property or arrange financing, for a total of up to 12 months.

Heirs have three primary options. The first and most common option is to sell the home and use the sale proceeds to repay the reverse mortgage. If the home sells for more than the loan balance, the heirs keep the difference. If the home sells for less than the loan balance, the heirs owe nothing beyond the sale price because of the HECM's non-recourse protection. In practice, FHA allows heirs to satisfy the debt by selling the property for at least 95% of its current appraised value, even if that amount is less than the loan balance.

The second option is for the heirs to pay off the reverse mortgage from other funds and keep the home. This might involve using inheritance money, savings, or taking out a traditional mortgage to refinance the reverse mortgage balance. This option makes sense when the home has sentimental value, when the heirs want to live in it, or when the home's market value significantly exceeds the reverse mortgage balance, making it financially advantageous to retain the property.

The third option is a deed in lieu of foreclosure, where the heirs voluntarily transfer ownership of the property to the lender to satisfy the debt. This option is typically used when the reverse mortgage balance exceeds the home's value and the heirs have no interest in keeping the property. Because HECMs are non-recourse, the heirs face no deficiency judgment and owe nothing beyond the property itself.

Special rules apply to surviving spouses. If the deceased was the only borrower but had a spouse who was listed as an "eligible non-borrowing spouse" on the HECM, that spouse may be able to remain in the home without the loan becoming immediately due, provided they meet certain conditions including occupying the home as their primary residence and maintaining property taxes, insurance, and upkeep. However, the surviving non-borrowing spouse cannot access any remaining HECM funds, and the loan balance continues to accrue interest. This protection, formalized by HUD in 2015, was a significant improvement over earlier rules that had forced some surviving spouses out of their homes.

For families considering a reverse mortgage, open communication about the loan's existence and terms is important. Many problems arise when heirs discover the reverse mortgage only after the borrower's death and are unprepared to deal with the compressed timeline for resolution. Borrowers should inform their heirs about the reverse mortgage, explain where the loan documents are kept, and discuss the family's preferences regarding the property.

Reverse Mortgage Pros and Cons

Like any financial product, reverse mortgages have both meaningful benefits and significant drawbacks. A balanced assessment of these factors is essential for determining whether a reverse mortgage aligns with your financial situation and retirement goals.

Advantages of Reverse Mortgages

The most compelling benefit is the ability to access home equity without selling your home or making monthly mortgage payments. For retirees on fixed incomes who have substantial equity but limited cash flow, this can dramatically improve quality of life. The funds can be used for any purpose, including supplementing retirement income, paying for healthcare or long-term care, making home modifications for aging in place, or simply enjoying retirement more fully.

The non-recourse feature provides essential peace of mind. You and your heirs will never owe more than the home is worth, regardless of how much the loan balance has grown. If home values decline or you live to a very advanced age, the FHA insurance fund absorbs the loss, not your family. This eliminates the risk of passing on unmanageable debt.

Reverse mortgage proceeds are not considered taxable income by the IRS, which means they do not increase your tax burden or affect your Social Security retirement benefits. This tax treatment makes reverse mortgages one of the most tax-efficient ways to access retirement funds. However, borrowers should be aware that holding large amounts of reverse mortgage proceeds in a bank account could affect eligibility for need-based programs like Medicaid.

The line of credit growth feature is unique to HECMs and has no equivalent in other financial products. The unused portion of a HECM line of credit grows at the current interest rate plus 0.5%, providing an increasing reserve of funds that can serve as a powerful financial planning tool. Some financial planners recommend establishing a HECM line of credit early in retirement, even for homeowners who do not need the funds immediately, to allow the credit line to grow as a hedge against future financial needs.

Disadvantages of Reverse Mortgages

The high costs are the most frequently cited disadvantage. Between upfront MIP, origination fees, closing costs, ongoing MIP, and interest accumulation, a reverse mortgage is considerably more expensive than a traditional mortgage or home equity product. These costs make reverse mortgages particularly poor choices for short-term borrowing needs or for homeowners who expect to move within a few years.

Equity erosion is an unavoidable consequence. Because the loan balance grows over time, the equity remaining in your home steadily decreases. For homeowners who intended to leave their property to heirs as an inheritance, this can be a difficult trade-off. A borrower who takes a reverse mortgage at 65 and lives to 90 may find that the vast majority of their home equity has been consumed by the loan balance, leaving little or nothing for their heirs.

The ongoing obligations can catch borrowers off guard. While no monthly mortgage payments are required, you must continue paying property taxes, homeowners insurance, and HOA fees, and maintain the property in reasonable condition. HUD data shows that thousands of reverse mortgage borrowers have faced default proceedings for failing to meet these obligations, particularly property tax payments. For borrowers with very limited income, this ongoing responsibility can be burdensome.

Reverse mortgages can complicate future financial decisions. Once you have a reverse mortgage, your options for relocating, downsizing, or making other housing changes become more complex. The loan must be repaid when you move, and if the loan balance has grown substantially, the proceeds from a sale may be insufficient to purchase a comparable replacement home, especially if you are moving to a higher-cost area.

Alternatives to Reverse Mortgages

Before committing to a reverse mortgage, it is wise to explore all available alternatives. Several options can provide access to cash or reduce expenses without the costs and complexity of a reverse mortgage, and one of these alternatives might better suit your specific circumstances.

Downsizing is often the most straightforward alternative. Selling your current home and purchasing a smaller, less expensive property can free up substantial equity in the form of cash. If you sell a $400,000 home and purchase a $250,000 property, you net approximately $150,000 (minus transaction costs), which you can invest or use to supplement retirement income. Downsizing also typically reduces ongoing expenses like property taxes, insurance, utilities, and maintenance. The downside is the emotional and practical difficulty of leaving a long-time home and community. Use our rent vs buy calculator to compare the economics of different housing scenarios.

A home equity line of credit (HELOC) allows you to borrow against your equity with lower upfront costs than a reverse mortgage. However, a HELOC requires monthly payments and typically has a variable interest rate. For retirees with reliable income who want to access smaller amounts of equity, a HELOC can be more cost-effective than a reverse mortgage. The key difference is that a HELOC requires you to make payments, while a reverse mortgage does not. Learn more about this option in our complete HELOC guide or explore our HELOC calculator.

A cash-out refinance replaces your existing mortgage with a larger one and gives you the difference in cash. This option is available to borrowers of any age and may offer lower interest rates than a reverse mortgage. However, it requires monthly payments and requires sufficient income to qualify. For retirees who have pension income, Social Security, and other reliable revenue streams, a cash-out refinance can provide access to equity at a lower total cost than a reverse mortgage. Use our refinance calculator to evaluate this option.

Government assistance programs exist for seniors who need help with specific expenses. Programs such as the Low Income Home Energy Assistance Program (LIHEAP), state property tax relief programs for seniors, Medicare Savings Programs, and the Supplemental Nutrition Assistance Program (SNAP) can reduce expenses without requiring you to borrow against your home. Many seniors are unaware of the assistance available to them. The National Council on Aging's BenefitsCheckUp tool can help identify programs for which you may be eligible.

Renting out a portion of your home can generate monthly income without giving up equity. If you have a spare bedroom, a finished basement, or a detached accessory dwelling unit, renting to a tenant or through short-term rental platforms can provide meaningful supplemental income. Some communities also have home-sharing programs that match older homeowners with compatible housemates, providing both income and companionship. This approach preserves your equity while generating cash flow, though it requires a willingness to share your living space.

Finally, a life insurance policy loan or annuity with a cash value component can provide access to funds without affecting your home equity. If you own whole life or universal life insurance with accumulated cash value, you can borrow against that value, typically at competitive interest rates and without tax consequences (as long as the policy remains in force). While this option reduces the death benefit available to your heirs, it preserves your home equity entirely.

Is a Reverse Mortgage Right for You

Deciding whether a reverse mortgage is the right choice requires honest self-assessment, a clear understanding of your financial situation, and careful consideration of your long-term goals. There is no one-size-fits-all answer, but certain circumstances make a reverse mortgage more or less appropriate.

A reverse mortgage tends to be most beneficial for homeowners who plan to stay in their home for many years, have substantial equity, have limited liquid assets or retirement income, and do not have a strong desire to leave the home to their heirs. The ideal reverse mortgage candidate is someone who loves their home, wants to age in place, needs supplemental income or a financial safety net, and is comfortable with the prospect that the loan will consume a significant portion of their equity over time.

Conversely, a reverse mortgage is generally a poor choice for homeowners who expect to move within the next five years, as the high upfront costs make it very expensive for short-duration borrowing. It is also typically inadvisable for homeowners who are struggling to pay property taxes and insurance, since these obligations continue even with a reverse mortgage, and failure to pay them can trigger default. Homeowners whose primary goal is to leave their property to heirs should consider whether the equity erosion caused by a reverse mortgage conflicts with that objective.

Financial planners increasingly recognize that reverse mortgages can play a valuable role in a comprehensive retirement plan, even for homeowners who are not financially distressed. Research from the Financial Planning Association and academic studies have shown that establishing a HECM line of credit early in retirement and drawing on it strategically, rather than drawing down investment portfolios during market downturns, can significantly improve portfolio longevity and overall retirement security. This "standby" reverse mortgage strategy is gaining acceptance among financial professionals as a legitimate retirement planning tool.

Before making a decision, take advantage of the mandatory HUD counseling session to ask questions and explore scenarios specific to your situation. Discuss the decision with family members who may be affected, particularly those who might inherit the property. Consider consulting with an independent financial planner who has no stake in whether you proceed with the loan. And if you do decide to move forward, shop among multiple lenders to compare interest rates, fees, and terms, as these can vary meaningfully between HECM lenders. Our affordability calculator and other tools can help you evaluate your broader financial picture as you weigh this important decision.