Posted June 2, 2025 in Blog / Education
How retirement age homeowners can use a Reverse Mortgage to navigate uncertain financial times
Today’s economy has many retirees and homeowners nearing retirement facing a financial crossroads. Inflation has changed the cost of everything in past several years. The financial markets and investment portfolios have become volatile and some fixed incomes are being stretched very thin or maxed out.
If you’re a homeowner with significant equity in your home, there’s a solution worth considering that could help protect your retirement and unlock much-needed financial flexibility: a reverse mortgage, or more specifically, a Home Equity Conversion Mortgage (HECM).
What is a HECM (Reverse Mortgage)?
A Home Equity Conversion Mortgage is a type of loan available to homeowners age 62 or older that allows them to convert a portion of their home equity into tax-free cash*. Unlike traditional home equity loans or lines of credit, no monthly mortgage payments are required—as long as the borrower lives in the home, maintains it, and pays property taxes and insurance.
Instead of paying the bank each month, the bank pays you—either as a lump sum, a line of credit, or monthly disbursements. The loan is repaid when the borrower sells the home, moves out permanently, or passes away.
Why many are taking a closer look
Most homeowners have seen steady appreciation in home values, meaning many homeowners in their 60s and 70s are sitting on substantial untapped equity. But rising costs of everyday items are making it harder or impossible to enjoy the retirement they planned for.
Here’s why reverse mortgages are gaining national attention:
- Protect your retirement savings
Withdrawing from retirement accounts during market downturns lock in financial losses. A reverse mortgage can serve as a buffer asset, allowing homeowners to delay withdrawals from investment accounts, giving their portfolios more time to recover.
- Supplemental income
Social Security alone often isn’t enough. A HECM can provide a predictable stream of income, helping cover everyday expenses—without having to sell investments or dip into emergency savings.
- Stay in your home
Many retirees choose to live close to family, friends, and the community they’ve helped build. A reverse mortgage makes that possible while turning the equity they’ve built into usable funds.
- No Monthly Mortgage Payments
This feature alone can free up hundreds—sometimes thousands—of dollars each month, dramatically improving cash flow for those living on a fixed income.
Who qualifies for a Reverse Mortgage?
To qualify, you must:
- Be 62 years or older
- Live in the home as your primary residence
- Have sufficient equity in your home
- Be able to maintain the property and pay property taxes and homeowners insurance
Before moving forward, all applicants must complete HUD-approved counseling, ensuring that the loan is fully understood and fits their long-term goals.
What to consider?
A reverse mortgage isn’t a one-size-fits-all solution. It’s a powerful financial tool—but only when used in the right context.
Ask yourself:
- Do I plan to live in my home long-term?
- Do I want to preserve other retirement assets?
- Would eliminating my monthly mortgage payment improve my quality of life?
- Do my heirs understand how the loan works?
It’s also important to schedule a joint session with your financial advisor and mortgage advisor to ensure it aligns with your overall retirement strategy.
⚠️ Disclaimer: This blog is for informational purposes only and should not be considered financial or tax advice. Please consult with your financial or tax advisor for guidance tailored to your personal situation.
Learn More
At Fairway Heartland, we help homeowners explore their options with clarity and confidence. Our team is experienced in guiding clients through the reverse mortgage process—from understanding eligibility to closing the loan—so you can make a fully informed decision.
To learn more about how a reverse mortgage might work for you or a loved one, contact us today!
