A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence.
FHA’s HECM provides these benefits. You can also use a HECM to purchase a primary residence. Advantages of a HECM reverse mortgage include:
- Remain independent. A reverse mortgage allows you to remain in your home and retain home ownership.
- Stay in your home. It allows you to remain in your home during your retirement years.
- No monthly mortgage payments required. You are not required to pay back the reverse mortgage loan or make any monthly mortgage payments until you permanently move out of the home.
- Tax-free money. Because the money you receive from a reverse mortgage is not considered income, it is tax free* and will not affect your Social Security or Medicare benefits.
- Freedom and flexibility. The money you get from a reverse mortgage is yours to use in any way you choose.
* Consult Tax Advisor
