Reverse Mortgage 101
A reverse mortgage — formally, the FHA-insured Home Equity Conversion Mortgage (HECM) — lets homeowners 62 and better convert part of their home equity into usable funds with no required monthly principal & interest payment. You keep ownership. You keep living there. You keep paying your taxes, insurance, and upkeep. Here's the rest, minus the jargon.
Myth-busting hour
Tap any myth for the truth. Yes, the first one really is the most common.
The truth: Title stays in your name — exactly like any other mortgage. The lender holds a lien, not the deed. As long as you meet the loan terms (live in the home as your primary residence, pay property taxes and homeowners insurance, and maintain the home), you cannot be forced to sell or move.
The truth: A HECM is non-recourse: neither you nor your heirs will ever owe more than the home is worth when the loan is repaid. If the balance exceeds the home’s value, FHA insurance covers the difference. If your heirs want to keep the home, they can typically satisfy the loan for the balance owed or 95% of the appraised value, whichever is less.
The truth: That thinking is decades out of date. Modern retirement-income research treats a HECM — especially a standby line of credit opened early — as a planning tool: a buffer against down markets, a bridge to delayed Social Security, a long-term care backstop. Waiting until crisis usually means fewer options, not more.
The truth: No — one of the most common uses of a HECM is paying off an existing mortgage at closing, which is exactly how the required monthly payment disappears. You need meaningful equity, not a free-and-clear title.
The truth: Reverse mortgage advances are loan proceeds, not income, so they’re generally not taxable and don’t affect Social Security retirement benefits or Medicare. (Funds held as cash can affect needs-based programs like Medicaid or SSI — ask Kelly and your advisor.) Always confirm your specific treatment with a tax professional.
The truth: The HECM is an FHA-insured program governed by HUD, with layers of consumer protection added over the past decade: mandatory independent counseling with a HUD-approved counselor, financial assessment, protections for eligible non-borrowing spouses, and limits on first-year draws. It is one of the more heavily safeguarded mortgage products in America.
Start to finish
A free conversation about your goals, your equity, and your real numbers. Family and advisors welcome — encouraged, actually.
Every borrower completes an independent session with a HUD-approved counselor before applying. It’s required by law and genuinely useful — an expert with no stake in your decision.
Kelly gathers the basics through Fairway’s secure systems. Straightforward — and she’s beside you for every form.
An FHA appraisal establishes your home’s value — one of the four inputs (with age, rates, and the HECM limit) that set your available funds.
Fairway verifies the details and completes the financial assessment — confirming you can sustain taxes, insurance, and upkeep.
Sign, then a three-business-day right of rescission on refinances, then funding. Existing mortgage paid off; your line, draw, or monthly advances go live. Memories, not mortgage payments.
The three flavors
Pay off your current mortgage and retire the required monthly payment. The classic.
How it works →A reverse line of credit whose unused portion grows over time by program rule. The planner's favorite.
How it works →Buy your next home with ~40–70% down and no required monthly payment on the rest. Right-size without the compromise.
How it works →Questions everyone asks
It depends on four things: the age of the youngest borrower (or eligible non-borrowing spouse), current interest rates, your home’s appraised value, and the HECM lending limit ($1,249,125 for 2026). Older borrowers and lower rates generally mean more available funds. For higher-value homes, Fairway also offers proprietary reverse options above the HECM limit. Kelly’s check-up gives you the real figure.
A HECM can pay you as a line of credit (the most flexible — and the unused portion grows), a lump sum, fixed monthly advances for life in the home (tenure) or for a set period (term), or a combination. The right mix depends on what the money is for — that’s a strategy conversation, and it’s Kelly’s favorite kind.
Property taxes, homeowners insurance, any HOA dues, and normal home maintenance — the obligations every homeowner has. You must also live in the home as your primary residence. Meet those, and no monthly mortgage payment is ever required.
At a maturity event: the last borrower sells the home, permanently moves out (living elsewhere more than 12 consecutive months, including care facilities), passes away, or fails to meet loan obligations. The home is typically sold and the loan repaid from proceeds; remaining equity goes to you or your heirs. And it’s non-recourse — nobody ever owes more than the home is worth.
Typical costs include FHA upfront and annual mortgage insurance, origination, and standard closing costs; most can be financed into the loan rather than paid in cash. Interest and MIP accrue on funds you’ve drawn. Kelly walks through every line at the check-up — if the costs don’t serve your plan, she’ll say so plainly.
Want the full glossary — LESA, MCA, expected rate, tenure vs. term? Learn the language →
Client stories
Highlights paraphrased from real client stories shared with Kelly — read the originals anytime on Experience.com.
Used the reverse purchase program to buy a home with roughly half the cash a traditional purchase would have taken — with no monthly mortgage payment required. Says Kelly made the whole thing easy, and even fun.
Jerry K. · South DakotaReverse Purchase (H4P)
Paid off her existing mortgage with a HECM and redirected that old payment to whatever she wants. Still owns her home, still in her forever house — and says Kelly handled every detail and made sure she understood each step.
Linda D. · South DakotaHECM Refinance
Went in hesitant and came out extremely happy. Kelly explained the entire program in plain language, stayed on top of every step, finished the paperwork early, and returned every call promptly.
Verified client · Sioux Falls areaHECM Refinance
Used the reverse purchase program to buy a home with roughly half the cash a traditional purchase would have taken — with no monthly mortgage payment required. Says Kelly made the whole thing easy, and even fun.
Jerry K. · South DakotaReverse Purchase (H4P)
Paid off her existing mortgage with a HECM and redirected that old payment to whatever she wants. Still owns her home, still in her forever house — and says Kelly handled every detail and made sure she understood each step.
Linda D. · South DakotaHECM Refinance
Went in hesitant and came out extremely happy. Kelly explained the entire program in plain language, stayed on top of every step, finished the paperwork early, and returned every call promptly.
Verified client · Sioux Falls areaHECM Refinance
No cost, no pressure, no jargon — just a clear look at what your housing wealth could do in your retirement plan. Text, call, or schedule whenever you’re ready.