Learn the language (it's smaller than it looks)

A loan for homeowners 62+ that converts part of your home equity into funds — with no required monthly principal & interest payment. Instead of you paying the balance down each month, interest accrues onto it, and the loan is repaid when you leave the home. You keep title, and you keep paying taxes, insurance, and upkeep.

The FHA-insured reverse mortgage — the version nearly everyone means when they say "reverse mortgage." Governed by HUD, insured by FHA, and wrapped in consumer protections including mandatory independent counseling. Pronounced "heck-um."

A HECM used to buy a home instead of refinancing one. You bring a large down payment — typically 40–70%, driven by age and rates — and finance the rest with no required monthly payment. Kelly’s shorthand: right-size without the compromise.

Kelly’s name for the HECM line-of-credit payout: a credit line whose unused portion grows over time by program rule and can’t be frozen for falling home values while you meet your loan obligations. The planner’s favorite flavor of HECM — compare it to a HELOC and see.

Privately insured reverse mortgages for homes worth more than the HECM lending limit. Different protections and terms than a HECM — Fairway offers options for higher-value homes; ask Kelly which program fits.

The total pool of funds a HECM makes available to you, calculated from the age of the youngest borrower, the expected interest rate, and the maximum claim amount. It’s the number the check-up produces — everything else (payoffs, set-asides, cash to you) draws from it.

The lesser of your home’s appraised value and the HECM lending limit ($1,249,125 for 2026). It’s the value base your principal limit is computed from — appraised value above the limit isn’t counted.

The long-term rate used to calculate your principal limit at application (different from the note rate you accrue). Lower expected rates generally mean more available funds — one reason the same house can produce different numbers in different months.

The unused portion of a HECM credit line increases monthly at the loan’s current rate plus the annual MIP rate. It’s a program rule — more borrowing capacity over time, regardless of home values. It is not interest income; it’s expanding access.

FHA’s insurance, charged upfront (a percentage of the MCA at closing) and annually (accruing on the balance). It funds the program’s signature protections: the non-recourse guarantee and the line-of-credit promises.

Two ways a HECM can pay you monthly: tenure pays a fixed advance for as long as you live in the home; term pays a larger fixed advance for a set number of years — the classic Social Security bridge structure.

A portion of your proceeds reserved at closing to pay property taxes and homeowners insurance on your behalf. Sometimes required by the financial assessment, sometimes chosen voluntarily — either way, it automates the two obligations most likely to endanger a senior’s home.

The HECM’s most important promise: neither you nor your heirs will ever owe more than the home is worth when it’s sold to repay the loan. If the balance exceeds the value, FHA insurance absorbs the difference. Heirs who want to keep the home can typically satisfy the loan at the balance or 95% of appraised value, whichever is less.

A mandatory session with an independent, HUD-approved counselor before any HECM application. Roughly an hour, modest fee, and genuinely useful — an expert with no stake in your decision makes sure you understand the loan. You receive a certificate required to proceed.

HUD-required underwriting review confirming you can sustain property taxes, insurance, and maintenance. Introduced in 2015 as a consumer protection; if the assessment raises concerns, a LESA can often keep the loan workable.

A spouse under 62 (or otherwise not on the loan) can be an "eligible non-borrowing spouse" with HUD protections allowing them to remain in the home after the borrowing spouse passes, if requirements are met. If this describes your household, raise it at the check-up — it shapes the whole plan.

On a HECM refinance, federal law gives you three business days after closing to cancel the loan for any reason. A built-in pause for certainty. (Purchases — H4P — do not have a rescission period.)

What ends the loan: the last borrower sells, permanently moves out (living elsewhere 12+ consecutive months, including care facilities), passes away, or fails to meet loan obligations. The loan then becomes due and payable, usually satisfied by selling the home; remaining equity belongs to you or your heirs.

The HECM home must be your primary residence — the place you live most of the year. Servicers confirm annually with a simple certification. Snowbirds are fine; permanently relocating is a maturity event.

After closing, a loan servicer manages your account: statements, draws from your line, annual occupancy certifications, and tax/insurance monitoring. Fairway’s reverse loans are serviced by a dedicated reverse mortgage servicer.

HECMs can often work with living trusts and, in some situations, a power of attorney — common in family caregiving scenarios. The rules are specific, so bring the documents to the check-up and Kelly will route the details correctly.