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.
Want to see how much income you could receive? Calculate your Reverse Mortgage Income For Life now to estimate monthly payments based on your home’s value, age, and equity.
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.
Concerned about what you’ll leave behind for your family? Calculate your Reverse Mortgage Legacy Inheritance Estimator now to see how much equity might remain for your heirs based on different scenarios and home appreciation rates.
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.
If you’re using a reverse mortgage to access funds without selling, explore your options. Calculate your Reverse Mortgage Cash Out Refinance now to see how much you can access while staying in your home.
Want to explore all your options? Visit our Reverse Mortgage page to understand different reverse mortgage products, eligibility requirements, and how they fit into your retirement strategy.
Wondering If a Reverse Mortgage Makes Sense for You or a Loved One?
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.
📘 Download our homebuyer guides about reverse mortgages for seniors.
📊 Check Current Rates for reverse mortgage options.
🧮 See your options with our Reverse Mortgage Income Calculator.
🏠 Learn more on our Reverse Mortgage page.
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