Reverse Mortgage (HECM)
For homeowners 62+, convert equity to cash with no monthly payment.
How it works
A reverse mortgage (HECM) lets homeowners 62 and older convert equity into cash with no required monthly payments; the FHA-insured balance is repaid when the home is sold or vacated. Interest and fees compound over time, reducing remaining equity. It is designed to supplement retirement income.
Key things to know
- Combined loan-to-value usually caps near 85% (cash-out refinance at 80%).
- A second lien keeps your first mortgage; a cash-out refinance replaces it.
- Compare the rate type — fixed (home equity loan) vs variable (HELOC).
- Budget for closing costs (often lower or waived on HELOCs).
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Frequently Asked Questions
- What is the reverse mortgage (hecm)?
- A reverse mortgage (HECM) lets homeowners 62 and older convert equity into cash with no required monthly payments; the FHA-insured balance is repaid when the home is sold or vacated. Interest and fees compound over time, reducing remaining equity. It is designed to supplement retirement income.
- Will it affect my first mortgage?
- Only a cash-out refinance replaces your first mortgage. A HELOC, home equity loan, or second mortgage sits behind it and leaves that rate alone.