How Does a Reverse Mortgage Work?
- By Jim Blackburn
- on
- 100 first time home buyer FAQs
Smart Guide for Seniors: Turning Home Equity Into Income—Without Monthly Payments
Want to stay in your home and tap into its value—without monthly mortgage payments?
A reverse mortgage can be a powerful financial tool for homeowners age 62 and up. It lets you convert your home’s equity into cash—without giving up ownership or making monthly payments. But it’s not a decision to take lightly.
Here’s how it works, and whether it’s right for-
1. A Reverse Mortgage Turns Equity Into Tax-Free Income
A reverse mortgage allows seniors to borrow money using their home as collateral. Unlike a traditional mortgage, you don’t pay the lender—the lender pays you:
-In monthly payments.
-A lump sum.
-Or a line of credit you can draw from as needed.
You still own the home, and you can stay in it as long as you live there and maintain it.
2. You Don’t Make Payments—The Loan Is Paid Back Later
With a reverse mortgage, repayment is delayed until one of three events happens:
1. You sell the home
2. You move out permanently (such as to assisted living)
3. You pass away
At that point, the home is typically sold, and the proceeds pay off the loan. Any remaining equity belongs to you or your heirs.
3. It Can Be a Smart Tool—If It Fits Your Goals
Reverse mortgages can:
Provide extra income in retirement Help cover medical costs or aging-in-place upgrades Eliminate monthly mortgage payments
But they also:
Reduce your home equity over time May impact inheritance or long-term financial flexibility Include fees and closing costs that need to be weighed carefully
The key is understanding your goals—and discussing them with a trusted advisor or family member.
Wondering If a Reverse Mortgage Makes Sense for You or a Loved One?
Download our free “Smart Retirement Mortgage Guide” — includes a reverse mortgage pros & cons checklist
Chat live now to ask about eligibility, payments, or long-term planning
Schedule a call with a Stairway Mortgage advisor to walk through options and make the best decision for your future
At Stairway Mortgage, we help you turn your home into a powerful financial ally—
so you can live comfortably, confidently, and on your own terms.
Ready to Take Your First Step?
Skip the guesswork. Take our quick Discovery Quiz to uncover your top financial priorities, so we can guide you toward the wealth-building strategies that fit your life.
- Takes just 5 minutes
- Tailored results based on your answers
- No credit check required
Need a Pre-Approval Letter—Fast?
Buying a home soon? Complete our short form and we’ll connect you with the best loan options for your target property and financial situation—fast.
- Only 2 minutes to complete
- Quick turnaround on pre-approval
- No credit score impact
Got a Few Questions First?
Let’s talk it through. Book a call and one of our friendly advisors will be in touch to guide you personally.
Schedule a CallRelated Posts
