Reverse Mortgage Overview

Reverse mortgages are also known as home equity conversion mortgages (HECM). This involves the bank making payments to the homeowner rather than the other way around. They are an effective way for those over the age of 62 to be able to access more money in their retirement years. A reverse mortgage is determined by the amount of equity available in a home and whether the homeowner meets the selection criteria. The home must be owned outright (or very close to) for a reverse mortgage deal to be possible. For those who are eligible there are positives and negatives outcomes, just like with anything else in life.


Reverse Mortgages Pros and Cons

What are the HECM loans pros and cons? Is a reverse mortgage the way to go and a viable option?

Reverse mortgages pros and cons weighs up the positives versus the negatives when it comes to this type of finance.


  • Have more money in the retirement years without the stress of living on a very limited income.
  • Ability for homeowners to be able to take advantage of the equity they have built up in their home over many years.
  • There are a variety of options to access the money from a reverse mortgage, including receiving monthly payments or a lump sum payment.
  • The older the applicant, the more money they will be eligible for.
  • No mortgage repayments.
  • Interest rates may be lower than with other options.
  • No heir is personally liable to pay off the balance of the loan.
  • Enables more quality of life for people in their senior years.
  • Homeowners retain the title to their home under a reverse mortgage.
  • Generally the proceeds of loans are not considered taxable income.


  • There are a number of fees attached to reverse mortgages, which are rolled over into the loan itself.
  • Applicants must be able to meet all the eligibility criteria.
  • If the applicant moves out of the home, then they will be required to pay back the loan.