Reverse Mortgage Q&A: What Seniors and Families Actually Need to Know

If you mention the words "reverse mortgage" at a family dinner, you will get one of two reactions. Either someone will lean in with genuine curiosity, or someone will shake their head and say, "Those are a scam." Very rarely is there anything in between.

The truth is more nuanced. Reverse mortgages are not a miracle product, and they are not a trap. They are a financial tool with specific rules, real protections, and legitimate uses, especially for families trying to figure out how to pay for senior care. But they come with conditions that matter, and the details are where families need to pay attention.

I sat down for my Your Best Season series to have a straight, jargon-free conversation about reverse mortgages: how they actually work, who they are designed for, and what the common misconceptions get wrong. Watch the full conversation in the embedded video above. Below, I am going to walk through the most important questions families ask.

What Is a Reverse Mortgage and How Does It Work?

The most common type of reverse mortgage is called a HECM, which stands for Home Equity Conversion Mortgage. It is insured by the Federal Housing Administration (FHA), and it is the only reverse mortgage product backed by the federal government.

Here is how it works in plain language: a homeowner who is 62 or older borrows against the equity in their home. Instead of making monthly payments to the lender (like a regular mortgage), the lender pays the homeowner. The loan balance grows over time as interest and fees accumulate. The loan becomes due when the homeowner sells the home, moves out permanently, or passes away.

Borrowers can receive the funds in several ways: as a lump sum, as a monthly payment, as a line of credit they draw from as needed, or as a combination of these options. The line of credit option is particularly interesting because the unused portion actually grows over time, giving the borrower access to more money the longer they wait to use it.

Who Is Eligible for a Reverse Mortgage?

The eligibility requirements for a HECM reverse mortgage are straightforward, though there are details that families often overlook:

• Age: At least one borrower must be 62 or older.
• Home equity: The home must have significant equity. There is no hard minimum, but most lenders look for at least 50 percent equity.
• Primary residence: The home must be the borrower's primary residence. Vacation homes and investment properties do not qualify.
• Property type: Single-family homes, FHA-approved condos, and some manufactured homes are eligible.
• Financial assessment: There is no minimum credit score, but lenders review income, credit history, and existing debts to confirm the borrower can afford property taxes, homeowner's insurance, and home maintenance.
• Counseling: Every HECM borrower must complete a counseling session with a HUD-approved counselor before the loan can proceed. This is required by law and is designed to make sure borrowers understand the terms.

One important detail for couples: if your parent's spouse is under 62, they may be listed as an "eligible non-borrowing spouse." This protects their right to remain in the home if the borrowing spouse passes away first, though the non-borrowing spouse cannot receive additional loan proceeds.

How Much Can a Senior Borrow with a Reverse Mortgage?

The amount depends on three factors: the borrower's age, the home's appraised value, and current interest rates. Older borrowers can access a larger percentage of their home's value.

As a rough guide: a 62-year-old may qualify for around 37 percent of their home's value, while a 92-year-old may qualify for up to 72 percent. For 2026, the HECM FHA mortgage limit is $1,249,125, which means even high-value homes have a cap on how much can be borrowed through the federally insured program.

For families in Burien and South King County, where median home values have climbed steadily over the past decade, many homeowners have significant equity to work with. A home purchased thirty years ago for $150,000 that is now valued at $550,000 or more represents a substantial financial resource that a reverse mortgage can unlock.

What Are the Most Common Myths About Reverse Mortgages?

This is where the conversation gets important, because the myths around reverse mortgages keep some families from exploring a tool that could genuinely help them.

Myth: The bank takes your home

This is the most persistent myth, and it is false. With a reverse mortgage, the homeowner retains the title to the home. It remains their property, just as it would with a traditional mortgage. The lender has a lien on the property (just like any mortgage), but ownership does not transfer.

Myth: You can owe more than your home is worth

HECM reverse mortgages are "non-recourse" loans. This means that when the loan comes due, neither the borrower nor their heirs will ever owe more than the home's appraised value at the time of sale. If the loan balance has grown larger than the home's value, FHA insurance covers the difference. This is a significant protection that many families do not know about.

Myth: Your heirs cannot inherit the home

Your heirs absolutely can inherit the home. When the borrower passes away, the heirs have several options: they can pay off the loan balance and keep the home, they can sell the home and keep any equity above the loan balance, or they can simply walk away if the loan balance exceeds the home's value (with no further financial obligation). Nothing in the reverse mortgage documents excludes heirs.

Myth: You need to own your home free and clear

You do not need a mortgage-free home to qualify. If there is an existing mortgage, the reverse mortgage pays it off first, and the remaining proceeds go to the borrower. Many people use a reverse mortgage specifically to eliminate their monthly mortgage payment.

Myth: You have to make monthly payments

Unlike a traditional mortgage, a reverse mortgage does not require monthly repayments. The loan balance grows over time as interest and fees are added. The borrower's only ongoing financial obligations are property taxes, homeowner's insurance, and basic home maintenance.

Can a Reverse Mortgage Help Pay for Senior Care?

This is where the conversation connects directly to the families I work with. Many adult children come to me asking how to pay for their parent's care, whether that is in-home help, an adult family home, or assisted living. For homeowners with significant equity, a reverse mortgage is one way to turn that equity into a care-funding resource.

Here is how families commonly use reverse mortgage proceeds in the context of senior care:

• Funding in-home care while the parent continues to live in the home. The line of credit option works well here because the family draws funds as needed to pay caregivers.
• Covering home modifications like grab bars, stair lifts, walk-in showers, and improved lighting to make aging in place safer.
• Paying for adult family home or assisted living costs by using the proceeds from a lump sum or monthly payments.

However, there is one critical rule to understand: the home must remain the borrower's primary residence. If the borrower moves out for more than 12 consecutive months, for example into a care facility, the reverse mortgage becomes due and payable. This means a reverse mortgage works well for funding in-home care or paying for a spouse's care, but it has limitations when both spouses move permanently to residential care.

For families where one parent needs residential care and the other remains in the home, a reverse mortgage can be a powerful bridge. For families where both parents will eventually need care, it is more commonly used as part of a transition plan: draw on the equity while one parent is still at home, then sell the home when the time comes to fund the next phase.

What Are the Real Downsides?

No financial tool is perfect, and I want to be honest about the trade-offs:

• The loan balance grows over time. Because interest compounds on the unpaid balance, the amount owed can grow significantly. This reduces the equity available to heirs.
• Upfront costs are substantial. HECM loans come with origination fees, closing costs, and FHA mortgage insurance premiums. These can total several thousand dollars.
• Ongoing obligations remain. The borrower must continue to pay property taxes, homeowner's insurance, and maintain the home. Failing to meet these obligations can trigger a loan default.
• It reduces the inheritance. If leaving the home's full equity to children or grandchildren is a priority, a reverse mortgage works against that goal.
• It is not free money. A reverse mortgage is a loan. The equity being accessed will need to be repaid from the home's value eventually.

I always encourage families to consult with a financial advisor and a HUD-approved reverse mortgage counselor before making a decision. This is not a choice to make quickly or under pressure.

What Should Burien and South King County Families Do Next?

If you are exploring how to fund care for an aging parent, a reverse mortgage may be one piece of the puzzle. Here is a practical starting point:

• Get the home appraised to understand your parent's current equity position.
• Schedule a session with a HUD-approved counselor. This is free or low-cost and required for any HECM loan. It is also a good education opportunity even if you are just exploring.
• Talk with a financial advisor who understands senior care costs and can help you compare options: reverse mortgage, long-term care insurance, Medicaid, VA benefits, or private pay.
• Tour care options so you understand what care actually costs in our area. Adult family homes in Burien and South King County typically range from $3,500 to $8,000 per month depending on the level of care needed.

The best financial decisions are made when families have time, information, and options. Do not wait for a hospital discharge or a crisis to start this conversation.

Watch the full reverse mortgage Q&A in the video embedded above for a straightforward, myth-busting conversation that cuts through the noise.

Exploring care options for your parent? Schedule a Visit to tour Burien Best Care Home and talk with us about what care costs and how families fund it, or Download Our Family Guide for an honest overview of adult family home care in South King County.