What You Need to Know Before Getting a Reverse Mortgage

The Basic Requirements: Age, Home Ownership, and Equity

To get a reverse mortgage, you must be at least 62 years old, own your home outright or have paid down most of the mortgage, and live in it as your primary residence. The lender will check your age through a government ID, verify you own the property through a title search, and order an appraisal to determine how much equity you have built up. You cannot use a reverse mortgage on a second home, rental property, or a home you own with someone who is under 62 — though some lenders allow non-borrowing spouses under 62 to stay in the home after you pass away if certain conditions are met.

The amount you can borrow depends on three things: your age, current interest rates, and your home's value. The older you are, the more you can borrow, because the lender expects to recover the loan over a shorter time. If you are 62, you might borrow 20 to 30 percent of your home's value; at 85, that could rise to 50 to 60 percent. Interest rates also shift the amount — when rates are lower, you can borrow more. The lender will explain your specific number before you commit.

Key Takeaways

• You must be at least 62, own your home as your primary residence, and have significant equity — usually at least 50 percent of the home paid off, though some lenders accept less.
• The lender will order a home appraisal, verify your ownership through a title search, and check your age and credit history before approval.
• You remain responsible for property taxes, homeowners insurance, and home maintenance; failure to pay these can trigger loan repayment.
• The amount you can borrow is lower if you are younger, if interest rates are higher, or if your home is worth less.
• A reverse mortgage becomes due when you sell the home, move out permanently, pass away, or stop meeting the payment obligations listed in your loan agreement.

How Much Equity You Need in Your Home

Most reverse mortgage lenders require you to own at least 50 percent of your home — meaning you have paid off half the mortgage or more. Some lenders will work with borrowers who have paid off 40 percent, but the amount you can borrow will be smaller. If you still owe a significant amount on a traditional mortgage, you will have to pay off that loan first using the money from the reverse mortgage, which reduces what you have left to use.

The lender calculates your available funds by taking your home's appraised value, subtracting what you still owe on any existing mortgage, and then applying a percentage based on your age and current interest rates. For example, if your home is worth $300,000 and you still owe $50,000 on a traditional mortgage, the lender works with $250,000 in equity. If you are 75 and rates are at current levels, you might be able to borrow around $125,000 to $150,000 of that equity — but the first $50,000 goes to paying off your existing loan, leaving you $75,000 to $100,000 in actual funds.

The Home Must Meet Physical and Legal Standards

Your home must be a single-family house, a condo in an approved complex, a manufactured home built after 1976 and permanently affixed to a foundation, or a two- to four-unit property where you live in one unit. Cooperative apartments, mobile homes on rented land, and homes in unapproved condo complexes do not may have access to. The lender will verify the property type during the appraisal process.

The home must also be in decent condition — the lender's appraiser will note any major structural problems, roof damage, or code violations. If the inspection finds serious issues, you may have to repair them before the loan closes, or the lender may refuse the loan altogether. This is different from a traditional mortgage appraisal; the lender is checking whether the home will still be worth enough to cover the loan when it comes due, which could be 20 or 30 years from now.

Your Ongoing Responsibilities After Closing

Getting a reverse mortgage does not mean you stop paying for your home. You remain responsible for property taxes, homeowners insurance, and routine maintenance. If you fall behind on property taxes or let your insurance lapse, the lender can declare the loan in default and demand repayment. This catches many borrowers off guard — they assume a reverse mortgage means no more payments, but that is not how it works.

You must also keep the home in reasonable condition. The lender can require repairs if the home's value drops significantly or if neglect creates a safety hazard. Some reverse mortgages include a "set-aside" — the lender holds back a portion of your funds to cover property taxes and insurance for several years, reducing the amount you receive upfront but protecting you from default later.

Credit History and Income Verification

Lenders will review your credit report, but a reverse mortgage has much looser credit requirements than a traditional mortgage. Late payments, collections, or even a bankruptcy will not automatically disqualify you — the lender is mainly checking whether you have a pattern of not paying property taxes or homeowners insurance. If you have defaulted on these specific obligations in the past, that is a red flag.

You do not need to prove current income to may have access to for a reverse mortgage. The lender may ask about your income and assets to assess whether you can afford property taxes and insurance going forward, but they will not require pay stubs or tax returns the way a traditional lender does. Some lenders use an "ability to repay" assessment, which looks at your income and debts to predict whether you will stay current on taxes and insurance; if the assessment suggests you will struggle, the lender may require a larger set-aside or deny the loan.

What Happens When the Loan Becomes Due

A reverse mortgage is not forgiven when you pass away. Your heirs inherit the home, but they also inherit the debt. They can sell the home to pay off the loan, refinance into a traditional mortgage, or pay the balance themselves if they want to keep the property. The loan also becomes due if you move out of the home permanently, sell it, or stop meeting your obligations for property taxes and insurance.

If you move into a nursing home or assisted living facility, the loan typically becomes due within 12 months, though some programs allow a longer grace period if a spouse or dependent still lives in the home. This is an important detail to discuss with the lender before you close — if you think you might need long-term care soon, a reverse mortgage may not be the right choice.

The Counseling Requirement Before You Close

Federal law requires you to complete counseling with a HUD-approved counselor before you can close a reverse mortgage. This counselor is independent — they do not work for the lender — and they will explain how the loan works, what it costs, and what happens to your heirs. The counseling takes about 90 minutes and covers alternatives to a reverse mortgage, the risks, and your obligations. You pay for this counseling, usually $125 to $300, though some nonprofits offer it free or at reduced cost.

The counselor will give you a certificate of completion, which you must provide to the lender before closing. This is not optional, and it is not a rubber stamp — if the counselor believes a reverse mortgage is a bad fit for your situation, they will say so in their report, and some lenders will reconsider. The counseling is one of the few real protections built into the reverse mortgage process, so take it seriously.

Frequently Asked Questions

Can I get a reverse mortgage if I still owe money on my regular mortgage?

Yes, but the reverse mortgage funds must pay off the existing loan first. If you owe $80,000 on a traditional mortgage and can borrow $150,000 total, the lender sends $80,000 to your current lender and you receive $70,000. Some borrowers find this worthwhile; others decide the remaining funds are not enough to justify the cost and complexity.

What if my home is worth less than I think it is?

The lender's appraisal is binding — that is the number they use to calculate how much you can borrow. If the appraisal comes in lower than you expected, you can challenge it by providing comparable sales data, but the lender has the final say. You can also walk away from the loan before closing if you are unhappy with the appraised value.

Do I have to be married to my spouse to include them in the reverse mortgage?

No. A spouse does not have to be on the loan to live in the home after you pass away, but the lender must know about them and approve the arrangement. If your spouse is under 62 and not on the loan, they will owe the full balance when you die, though they may have time to sell or refinance. Discuss this with the lender and your counselor before closing.

What if I cannot afford the property taxes and insurance after I get the reverse mortgage?

This is a real risk. If you cannot pay these costs, the lender can foreclose. Some reverse mortgages include a set-aside that holds back funds to cover these expenses for a period of time, reducing your upfront money but protecting you. Discuss set-asides with the lender before you close.

Can the lender kick me out of my home?

Only if you stop paying property taxes or insurance, or if you move out permanently and do not return within 12 months. The lender cannot evict you simply because you are old or because you have owned the home a long time. As long as you meet your obligations, you can stay.