Your existing mortgage will be paid off completely with proceeds from the reverse mortgage as a requirement of the loan. This eliminates your monthly mortgage payments*, freeing up that money for other needs like home upgrades, medical expenses or helping loved ones financially.

*The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.

Apart from mandatory reverse mortgage counseling costs and FHA insurance (on certain loans only), the fees for a reverse mortgage are generally the same as those for a traditional forward mortgage. It’s also important to remember that with a reverse mortgage, most fees are added to the loan balance, which means you pay little out-of-pocket upfront.

The loan ends when the last borrower—or an eligible non-borrowing spouse—passes away or no longer lives in the home. At this time, the loan principal and all accrued interest must be repaid. You or your heirs will have the option to repay the balance through the sale of the home or by paying off the mortgage balance with other funds. If the loan balance exceeds the home’s value, you or your heirs can also sign over the home’s title to the lender and walk away.

No. A reverse mortgage is a “non-recourse” loan, which means that if you default on the loan, or if the loan cannot otherwise be repaid, the lender can only enforce the debt through the sale of the property and cannot look to your other assets (or your estate’s assets) to meet any outstanding balance. If the loan balance is higher than the home’s value, your heirs will not be responsible for paying the difference when the home is sold to repay the balance.

With a reverse mortgage, you — not the lender — own and control your home. You can’t be removed from the home so long as you uphold the terms of the loan. As with a traditional forward mortgage, the lender simply puts a lien on the property to ensure the loan will be repaid.