Reverse Mortgage

A reverse mortgage lets a homeowner aged 62 or older convert part of the equity in their home into cash, without selling it and without taking on a monthly mortgage payment.

It’s called “reverse” because the money flows the other way. Instead of you paying the lender, the lender pays you. You can take it as a lump sum, as regular payments, as a line of credit you draw on, or a mix. You keep the title and keep living in the home.

When it’s repaid

The loan comes due when the last borrower sells the home, moves out permanently, or dies. It’s usually paid off from the sale of the house. Interest builds up the whole time, so the balance grows instead of shrinking.

What you’re still responsible for

There’s no monthly mortgage payment, but you still have the costs of owning a home. You have to keep paying property taxes and homeowners insurance, keep the home in good repair, and keep living there as your main home. Falling behind on any of those can make the loan come due.

Think about it with your family

A reverse mortgage leaves less for your heirs. Talk that through with your family before you do the paperwork. Federally insured reverse mortgages require independent counseling from a HUD-approved counselor first. It’s there so nobody signs one without understanding it.

It can be a good fit for a retiree with a lot of equity and limited income. Either way, it’s a serious commitment. A Barrett loan officer will walk you through your other options too.