What is a Reverse Mortgage?  And Other Frequently Asked Questions

A HECM Reverse Mortgage is just a mortgage like any other mortgage except for one thing - you are not required to make mortgage payments. When you don't make a mortgage payment, that amount is added to the balance of your loan. You still own your home, just like a regular mortgage. And, if you sell, you are entitled to any proceeds after the balance of your mortgage has been paid.

The reverse mortgage has always been a tool to allow seniors to tap into the money that was previously "tied up" in their home, but it has gone through many changes in the last several years. The new HECM Reverse Mortgage now brings tremendous flexibility, advantages, and guarantees to the overall retirement portfolio that other investment tools by themselves simply don't offer. As a result, many financial planners are now incorporating a HECM reverse mortgage into the overall financial plan of their clients.

How Can a Reverse Mortgage be Used?

  1. You can draw a lump sum. This option is usually used to pay off a mortgage, other debt or medical bills. However, the lump sum payment can be used for any other purpose. It is done at the time of closing.
  2. You can set up a fixed income payment. This TAX FREE INCOME can be for the life of both borrowers, or it can be for a specific period of time -for instance, to delay social security. You can draw the maximum income your equity will provide, or it can be what is needed to cover a specific expense like long term care. Learn more about HECM Tax Free Income.
  3. You can establish a line of credit that grows at a specified rate regardless of the value of your home. This line of credit is extremely liquid and can be drawn for any purpose without penalty for withdrawl. When integrated properly with the overall retirement financial plan it can provide more income for a longer period of time, and provide security when other investments are down. Learn more about HECM - Stability in Retirement.
  4. You can purchase a home with the HECM Reverse Mortgage with roughly 50% down and no mortgage payment. Learn more about HECM Home Purchase.

Don Graves: President of the HECM Institute for Housing Wealth Studies, and Professor of Retirement Income at The American College of Financial Services. He is considered one of the nation’s leading educators on HECM Reverse Mortgages in Retirement Income Planning.

Steve Savant: Syndicated financial columnist, Host of the consumer talk show Right on the Money, and News Anchor for On the Money News.
This video is a section of a broadcast of the consumer talk show Right on the Money.

Neither of the individuals in this video are representatives of Landmark Mortgage Planners in any capacity.

Reverse Mortgages in the News