Alert
Close

Help hungry seniors. Deliver help and hope before Thanksgiving. Donate

Highlights

Close

You and Your Town Contest-You could win an AARP RealPad

AARP Auto Buying Program

Contests and
Sweeps

$10,000 Winter Escapes Sweepstakes

Beat the cold and cozy up to a chance of winning $10,000! See official rules.

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

10 Things You Should Know About Reverse Mortgages

Understand the pros and cons before signing on the dotted line

En español | More than 78,000 reverse mortgages were insured last year by the U.S. Department of Housing and Urban Development (HUD). These federally insured loans, also called Home Equity Conversion Mortgages (HECMs), have become more popular as older Americans are looking to tap the equity in their homes so they can age in place.

See also: Learn how to appeal your property tax bill.

More than 660,000 reverse mortgages were issued between 1990 and 2010. Here are some frequently asked questions about these loans.

Q: What is a reverse mortgage?

A: A reverse mortgage is a special type of loan that allows you to borrow against the equity that you've built up in your home. You must be at least age 62 to qualify. You can put the money toward anything you like, from paying medical bills to making home improvements. Unlike a traditional home equity loan, a reverse mortgage doesn't need to be paid back immediately, perhaps not even during your lifetime. That means no monthly checks to write to your lender. The HECM reverse mortgage program is run by the Federal Housing Administration (FHA).

Q: Can anyone apply for a reverse mortgage?

A: No, you have to be at least 62. You also have to own your home outright or be able to pay off your home with the proceeds from a reverse mortgage. You must live in your home and your home must meet certain criteria according to HUD. Most single-family homes qualify, as do some condominiums, manufactured homes and multiunit structures that meet FHA requirements. 

Q: How do I apply for a reverse mortgage?

A: You can get a reverse mortgage through a reverse mortgage lender. Before you get a reverse mortgage you must meet with a reverse mortgage counselor, and there is a fee associated with that consultation. Usually, that cost (around $125) is rolled into the loan. You can receive the reverse mortgage in a lump sum, a line of credit or monthly payments. The loans are available in adjustable and fixed interest rates. If you choose a fixed interest rate, you will be erquired to take all of your proceeds in a single lump-sum payment.

Next: With a reverse mortgage, do I still own my home? >>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

featured
video

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Life insurance: you are covered rain or shine

Exclusive annuities for members from AARP Lifetime Income Program from New York Life.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Homeowners Insurance
Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points