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  • Writer's pictureNichole Fox

Advantages of a Reverse Mortgage Loan

Some of the general advantages possible through the use of a reverse mortgage include:

  • No monthly mortgage payments, as the loan is repaid by the sale or refinancing of the home. Borrower continues to pay taxes, insurance, and maintenance costs.*

  • Freedom to spend your money how you choose to spend it.

  • Little out-of-pocket expense. Fees may be financed as part of the mortgage.

  • No maturity date. A reverse mortgage becomes due when the borrower sells or moves out of the home, or if the borrower does not maintain the property taxes, homeowners’ insurance, or property maintenance or comply with all loan terms.

  • No prepayment penalty for FHA-insured Home Equity Conversion Mortgage (HECM) loans. These loans can be partially or fully paid off at any time with no additional fees or costs.

  • Asset protection. At the end of the reverse mortgage, the amount that must be paid is the sum of the actual funds received or advanced for fees, plus accrued interest. The repayment amount will never exceed the value of the home, as long as the property is sold to pay back the reverse mortgage.

*Eligibility is based primarily on the age of the youngest borrower or eligible non-borrowing spouse, current interest rates, and the value of the home. The property securing the loan must be the borrower's primary residence.

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