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Reverse Mortgages: How They Work and Who They’re For

A reverse mortgage lets homeowners age 62 and older turn part of their home equity into cash without selling the home or making monthly mortgage payments. It can be a valuable retirement tool for the right person, and it comes with real responsibilities. Here’s how it works.

Reviewed by Patriot Home Mortgage compliance, October 2026 · 3 min read

What a reverse mortgage is

With a traditional mortgage, you make payments to a lender. With a reverse mortgage, the lender pays you, using your home equity. The loan balance grows over time and is repaid later, usually when the home is sold.

Most reverse mortgages are Home Equity Conversion Mortgages (HECMs), which are insured by the FHA. The rest of this article describes HECMs.

Who qualifies

  • Age 62 or older. At least one borrower must meet the age requirement.
  • Enough equity. You own the home outright or have a balance low enough to be paid off with the reverse mortgage.
  • Primary residence. You live in the home most of the year.
  • Ability to keep up the home. The lender reviews whether you can pay property taxes, homeowners insurance and upkeep.
  • Counseling. Every HECM borrower must meet with a HUD-approved reverse mortgage counselor before applying.

How you can receive the money

  • A line of credit you draw from as needed
  • Monthly payments for a set term or for as long as you live in the home
  • A lump sum at closing
  • A combination of these

How much you can access depends on your age, your home’s value, current interest rates and a maximum home value HUD sets each year.

What you still have to pay

There’s no monthly mortgage payment, but a reverse mortgage isn’t free money. You must:

  • Pay property taxes and homeowners insurance on time
  • Keep the home in good repair
  • Pay HOA dues, if any
  • Continue living in the home as your primary residence

Falling behind on these can cause the loan to come due. The loan also has costs, including mortgage insurance premiums, origination fees and closing costs, which are usually paid from the loan proceeds.

Required counseling is a feature, not a hurdle. A HUD-approved counselor walks through costs, alternatives and how the loan affects your family. The CFPB lists questions to ask your counselor.

What happens later

The loan becomes due when the last borrower sells the home, moves out permanently or passes away. At that point:

  • The home can be sold to repay the loan, and any remaining equity goes to you or your heirs.
  • Heirs can keep the home by paying off the loan, often through a new mortgage.
  • You’ll never owe more than the home is worth. HECMs are non-recourse loans, so if the balance grows larger than the home’s value, FHA insurance covers the difference.

Spouses

If your spouse is younger than 62 or isn’t on the loan, rules for an “eligible non-borrowing spouse” may allow them to stay in the home after you pass away, if certain conditions are met. Make sure both of you understand these rules before closing; the CFPB’s reverse mortgage guide explains them.

Is a reverse mortgage right for you?

A reverse mortgage may make sense if you plan to stay in your home for years, want to supplement retirement income or cover rising costs, and can comfortably keep up with taxes, insurance and maintenance.

It may not be the best fit if you plan to move soon, want to leave the home to heirs free and clear, or would struggle with ongoing costs. Alternatives like downsizing or a home equity line of credit are worth comparing.

Bring your family into the conversation. A loan officer can walk you and your family through how a reverse mortgage would work for your home.

Talk to a Patriot loan officer

Every situation is different, and a short conversation is the quickest way to know what fits yours.

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This article is general information, not an offer to lend or a commitment to lend. All loans are subject to credit approval, underwriting and property valuation. Belem Servicing LLC, NMLS ID #715386 (NMLS Consumer Access).

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