Reverse mortgages: what they really do for homeowners
August 3, 2026
Reverse mortgages have a reputation problem. Most people hear the term and picture something predatory, or assume it's a last-resort move for desperate homeowners. The reality is more nuanced, and for the right person in the right situation, a reverse mortgage can be a genuinely useful financial tool. Worth understanding before you dismiss it.
A reverse mortgage lets homeowners 62 and older convert part of their home equity into cash, a line of credit, or monthly payments without selling the house or making monthly mortgage payments. The homeowner still owns the home and stays responsible for taxes, insurance, and maintenance. The loan gets repaid when the borrower sells, moves out permanently, or passes away. The most common version is the HECM, insured by the federal government, though proprietary (or "jumbo") reverse mortgages have grown in popularity for higher-value homes. The growth of proprietary products has been notable, and it has raised real questions about fee transparency that borrowers should ask about.