Reverse mortgages for senior homeowners

Many people find themselves in the position of being house-rich and cash-poor, and unfortunately many seniors are forced to sell the homes they have worked for all their lives just to make ends meet. 

You have seen actors and others on national TV commercials telling about reverse mortgages and the tremendous benefits they provide to homeowners 62 years of age and over. They truly are an amazing financial tool which has been the solution for many seniors in resolving the financial concerns and quality-of-life issues they face each day such as paying for medications, groceries and/or healthcare. In many cases it has been their only means of survival in the extremely difficult economic times in which we live. 

The Federal Housing Authority offers a reverse mortgage program called Home Equity Conversion Mortgage. The HECM program is the only reverse mortgage insured by the federal government, and is only available through an FHA-approved lender.

There have been a lot of myths associated with reverse mortgages and many are immediately turned off to the idea when it is presented. The following are the true benefits of a reverse mortgage:

  • You can pay off your mortgage, if any. But you don’t have to have an existing mortgage in order to obtain a reverse mortgage
  • No loan repayment is required as long as your home is your primary residence
  • You will continue to own your home; you still retain the title, not the bank
  • The funds you receive are tax-free
  • Your Social Security and Medicare benefits are not affected.
  • You can repay at any time with no pre-payment penalty
  • There are no restrictions on how you spend your money
  • Upon passing of you and your spouse, your heirs keep all remaining equity

For more information about FHA's Home Equity Conversion Mortgage program, including approved lenders, frequently asked questions and a mortgage calculator, visit

Kristi Vaughn

I am a Licensed Social Worker and owner of Adult Comfort Care: A Person Centered in-home assisted living resource for seniors and their families.  We serve Western Cuyahoga County.

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Volume 4, Issue 20, Posted 10:21 AM, 10.02.2012