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Reverse Mortgages

How Do Reverse Mortgages Work?

When you have a regular mortgage, you pay the lender every month to buy your home over time. In a reverse mortgage, you get a loan in which the lender pays you. Reverse mortgages take part of the equity in your home and convert it into payments to you – a kind of advance payment on your home equity. The money you get usually is tax-free. Generally, you don’t have to pay back the money for as long as you live in your home. When you die, sell your home, or move out, you, your spouse, or your estate would repay the loan. Sometimes that means selling the home to get money to repay the loan.

There are three kinds of reverse mortgages: single purpose reverse mortgages – offered by some state and local government agencies, as well as non-profits; proprietary reverse mortgages – private loans; and federally-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECMs).

If you choose a reverse mortgage of any kind, you get a loan in which you borrow against the equity in your home. You keep the title to your home. Instead of paying monthly mortgage paymentsfrom your asset accounts (checking, savings, etc.) you get an advance on part of your home equity. That means that your mortgage amount increases instead of decreases, hence the name 'reverse' mortgage.  The money you get usually is not taxable, and it generally won’t affect your Social Security or Medicare benefits. When the last surviving borrower dies, sells the home, or no longer lives in the home as a principal residence, the loan has to be repaid. In certain situations, a non-borrowing spouse may be able to remain in the home.

How Do I Begin The Reverse Mortgage Process?

There are many things to consider about reverse mortgages.  The Jake Taylor Team is available to answer any questions you may have prior to beginning the reverse mortgage process.  We welcome the inclusion and participation from family members and loved ones in this most important decision.  To begin, simply fill out the contact form on this page, or give us a call today at

602.796.0358, or toll free at 855.225.5525.  

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