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What is a reverse mortgage?


A reverse mortgage is a special type of home loan only for homeowners who are 62 and older.

A reverse mortgage loan allows homeowners to borrow money using their home as security for the loan, just like a traditional mortgage. Unlike a traditional mortgage, with a reverse mortgage, borrowers don’t make monthly mortgage payments. The loan is repaid when the borrowers no longer live in the home. Interest and fees are added to the loan balance each month and the balance grows. With a reverse mortgage homeowners are still required to pay property taxes and homeowner’s insurance, and keep their house in good condition. 

With a reverse mortgage, the amount the homeowner owes to the lender goes up – not down – over time. This is because interest and fees are added to the loan balance each month. As your loan balance increases, your home equity decreases. 

Warning: A reverse mortgage is not free money. It is a loan that homeowners or their heirs will have to pay back eventually, usually by selling the home. 

To learn more, check out these resources: 

Considering a Reverse Mortgage guide  – a brief, easy-to-understand guide on the basics of reverse mortgages. 

Reverse Mortgage Discussion guide  – an in-depth resource for those thinking about a reverse mortgage. 
Know Before You Owe Reverse Mortgage video  – a two-minute video overview of reverse mortgages for homeowners and their families. 

Talk to a reverse mortgage counselor – Find a Department of Housing and Urban Development (HUD) approved counselor by visiting HUD’s counselor search page  or calling HUD’s housing counselor referral line at (800) 569-4287.


Note: this information only applies to Home Equity Conversion mortgages (HECMs), which are the most common type of reverse mortgage.  

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The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.