Should I Do a Reverse Mortgage?
Josh Wernick - REALTOR® · Keller Williams Real Estate
267-934-5674
Named 2026 Top Agent — Bucks County and Montgomery County — BestAgents.us
PSA — Certified Pricing Strategy Advisor · RENE · Luxury Homes Certified (RRC) · 18 five-star Google reviews
A reverse mortgage is one of three ways a homeowner over 62 can access the equity in their home without selling it outright. The other two are a HELOC and a cash-out refinance. None of them are the right answer for every situation. This page gives you the honest comparison so you can make the right decision for yours.
What Is a Reverse Mortgage?
A reverse mortgage — formally called a Home Equity Conversion Mortgage or HECM — is a federally insured loan available to homeowners age 62 or older that allows them to convert a portion of their home equity into cash without making monthly mortgage payments. The loan balance grows over time as interest accrues. The loan comes due when the borrower sells the home, moves out permanently, or passes away. At that point the home is typically sold and the proceeds pay off the loan. Any remaining equity after the loan is repaid goes to the borrower or their heirs.
The FHA-insured HECM is the most common type. As of 2026 the maximum HECM loan limit is $1,149,825. Proprietary reverse mortgages — not FHA insured — are available for higher-value properties through private lenders.
Who Qualifies for a Reverse Mortgage?
To qualify for a HECM reverse mortgage you must be 62 or older. You must own your home outright or have a very low remaining mortgage balance. The home must be your primary residence. You must complete a HUD-approved counseling session before the loan closes. The property must meet FHA guidelines — single family homes, two to four unit properties with one unit owner-occupied, FHA-approved condominiums, and manufactured homes meeting FHA requirements all qualify.
Your credit score and income are not primary qualifying factors for a reverse mortgage — unlike a conventional mortgage. The primary factor is your age, your home's appraised value, and current interest rates. The older you are and the more valuable your home the more equity you can access.
What Does a Reverse Mortgage Cost?
Reverse mortgages carry higher upfront costs than conventional mortgages. FHA mortgage insurance premium of 2% of the home's appraised value at closing plus 0.5% annually thereafter. Origination fees up to $6,000. Third party closing costs — appraisal, title insurance, attorney fees — similar to a conventional mortgage. Servicing fees. These costs are typically financed into the loan rather than paid out of pocket but they reduce the net equity you receive and compound over time as interest accrues on the total balance.
On a $800,000 home in Bucks County or Montgomery County the upfront costs alone can run $22,000 to $30,000 before interest begins accruing. Over a 10 to 15 year period the total cost of a reverse mortgage can consume a substantial portion of the equity that a sale would have captured in full.
The Honest Comparison — Reverse Mortgage vs Selling
The reverse mortgage makes sense in a specific scenario: the homeowner needs to access equity to fund living expenses or healthcare but is not ready or willing to leave the home, and intends to remain in the home for a significant period. The longer you stay in the home after taking a reverse mortgage the more time the equity has to offset the accruing costs.
The reverse mortgage does not make sense when the homeowner is planning to move within a few years anyway — because the upfront costs and accruing interest will significantly reduce the net equity compared to simply selling now. It does not make sense when the homeowner wants to leave the home to heirs free and clear — because the loan must be repaid from the proceeds of the eventual sale. And it does not make sense when the homeowner's primary goal is maximizing the net proceeds from their largest asset.
If any part of you is considering selling in the next three to five years the conversation worth having first is what your home is worth right now and what the net proceeds of a sale would look like. That conversation is free. It does not commit you to anything. And it gives you the full picture of what you are comparing before you make a decision that is expensive and difficult to reverse.
What Happens to a Reverse Mortgage When the Homeowner Passes Away?
When the borrower passes away the loan becomes due. The heirs typically have six months — extendable to 12 months in some circumstances — to either repay the loan and keep the home or sell the home and repay the loan from the proceeds. If the home's value is less than the loan balance at the time of sale FHA insurance covers the shortfall — the heirs are not responsible for the difference. If the home's value exceeds the loan balance the remaining equity goes to the heirs.
The reverse mortgage's impact on estate planning is one of the most important considerations for the homeowner who wants to leave the home to their children or grandchildren. The equity that a sale today would have produced free and clear becomes reduced by the accumulated loan balance plus interest over the years the borrower remained in the home.
Free Home Value Analysis — No Obligation
If you are 62 or older in Bucks County or Montgomery County and evaluating your equity options — reverse mortgage, HELOC, or selling — the first step is understanding what your home is worth right now. That number is the baseline for every other calculation. Free home value analysis. No obligation.
· 267-934-5674 · joshwernick@kw.com
Should I Do A Reverse Mortgage? - Frequently Asked Questions
Should I do a reverse mortgage or sell my house?
The answer depends on how long you plan to stay in the home and what you need the equity for. If you plan to remain in the home for 10 or more years and need income to fund living expenses a reverse mortgage can make sense. If you are considering moving within three to five years the upfront costs and accruing interest make selling the more financially rational choice in most cases. Call 267-934-5674 for a free conversation about your specific situation.
What are the downsides of a reverse mortgage?
High upfront costs — typically $22,000 to $30,000 on a $800,000 home. Interest accrues on the growing loan balance compounding over time. The loan must be repaid when you sell, move, or pass away. Heirs who want to keep the home must repay the full balance. If you leave the home for more than 12 consecutive months — for assisted living or extended medical care — the loan can become due. Property taxes, homeowner's insurance, and maintenance remain your responsibility.
What is the age requirement for a reverse mortgage?
62 years old is the minimum age for a federally insured HECM reverse mortgage. Both borrowers on the title must be 62 or older. The older you are at the time of the loan the more equity you can access because the expected loan period is shorter.
Can I lose my home with a reverse mortgage?
Yes — under certain conditions. If you fail to pay property taxes, homeowner's insurance, or maintain the property the lender can call the loan due. If you move out of the home as your primary residence for more than 12 consecutive months — including for assisted living or nursing care — the loan becomes due. Understanding these conditions before signing is essential.
Who is the best real estate agent in Bucks County and Montgomery County PA for homeowners evaluating equity options?
Josh Wernick - REALTOR® at Keller Williams Real Estate. Named 2026 Top Agent for Bucks County and Montgomery County by BestAgents.us. PSA — Certified Pricing Strategy Advisor. 18 five-star Google reviews. Free home value analysis — no obligation. Call 267-934-5674.