Thinking about using your home equity to stay comfortably in your South Shore home longer? You’re not alone. Many local homeowners explore reverse mortgages as a way to simplify cash flow, fund care, or right-size without taking on a monthly mortgage payment. In this guide, you’ll learn how a Home Equity Conversion Mortgage (HECM) works, who qualifies, the true costs, common use-cases here on the South Shore, and practical next steps so you can decide with confidence. Let’s dive in.

HECM in plain English

A HECM is the FHA-insured reverse mortgage most homeowners use to turn a portion of home equity into cash while continuing to live in the home. You keep title, and you must meet ongoing obligations like taxes, insurance, and maintenance. The loan is typically repaid when the last borrower moves out permanently or passes away, and heirs can sell or refinance if they wish to keep the property.

The most important eligibility rule is age. HECM borrowers must be 62 or older. If you’re 60 or 61, some private reverse mortgage products or traditional home equity options may be available, but they are not FHA-insured and carry different terms.

Who qualifies on the South Shore

Age and occupancy

• Borrower(s) must be at least 62 years old. The youngest borrower’s age influences how much you can access.
• The home must be your primary residence, and you need to live in it most of the year.

Property types

• Single-family homes, many FHA-approved condos, certain 2–4 unit owner-occupied properties, and some manufactured homes that meet FHA standards may qualify.
• If you live in a condominium, confirm whether your association is FHA-approved for HECMs before you get too far along.

Counseling and financial review

• A HUD-approved counseling session is required before a HECM can be approved. Counseling can be completed by phone, video, or in person and helps you review costs and alternatives.
• Lenders perform a financial assessment to confirm you can keep up with property taxes, insurance, HOA dues, and basic upkeep. In some cases, a portion of proceeds may be set aside to pay those charges.

How the money works

Payout options

• Tenure: steady monthly payments for as long as at least one borrower lives in the home.
• Term: monthly payments for a set number of months.
• Line of Credit: draw funds when you need them; with many adjustable-rate HECMs, the available credit can grow over time.
• Lump Sum: a one-time payout, typically with a fixed-rate HECM.
• Combination: mix a smaller lump sum or monthly payment with a line of credit.

Each option aligns with a common goal. A line of credit often serves as an emergency reserve. Monthly payments can supplement retirement income. A lump sum can pay off an existing mortgage or other high-interest debt.

Typical South Shore uses

• Aging in place: fund home updates like ramps, grab bars, or a first-floor bedroom conversion, and cover in-home support.
• Stabilize cash flow: supplement fixed income to cover taxes, insurance, utilities, or part-time caregiving.
• Right-size locally: sell a larger property and use HECM for Purchase to buy a more manageable home closer to services or family.
• Debt management: pay off an existing mortgage to remove a monthly payment and free up cash, while staying in your home.
• Emergency buffer: set up a line of credit for unexpected health expenses or major repairs.

Costs and what affects cash available

Exact numbers change over time, so review current disclosures carefully. Common cost components include:

• Upfront FHA mortgage insurance premium (MIP) and an annual MIP on the outstanding balance.
• Interest that accrues on the balance, available in adjustable-rate and fixed-rate versions.
• Lender origination fee, subject to FHA caps.
• Third-party closing costs such as appraisal, title insurance, recording, and required counseling.
• Possible servicing or administrative fees.

Principal limit factors

How much you can access depends on:

• The youngest borrower’s age. Older borrowers generally qualify for a higher principal limit.
• Interest rate environment. Lower rates typically mean a higher principal limit on adjustable-rate loans.
• The lesser of your home’s appraised value or the FHA HECM lending limit.

With HECM for Purchase, the reverse mortgage covers part of the purchase price and you bring the rest to closing.

Loan balance and home equity

With a HECM, interest and MIP accrue and are added to the balance. Unless you choose to make payments, the balance will grow over time. Larger upfront payouts, like a lump sum, can increase the balance faster than a line of credit you draw only as needed.

Pros and cons to weigh

Benefits

• No required monthly mortgage payments as long as you meet property obligations.
• Flexible payout choices to match your needs.
• Many adjustable-rate HECM lines of credit grow over time, offering a cushion against longevity risk.
• Non-recourse protection through FHA insurance, so you or your heirs won’t owe more than the home’s value when the loan is due.
• Can help you age in place or buy a right-size home without a monthly mortgage payment.

Risks and tradeoffs

• Upfront and ongoing costs can be higher than conventional loans and reduce net proceeds.
• The loan balance grows and can reduce the equity passed on to heirs.
• You must continue paying taxes, insurance, HOA dues, and maintain the property. Falling behind can lead to default.
• Proceeds may affect eligibility for certain means-tested programs depending on how funds are used and local rules. Get benefits counseling if this is a concern.
• Rules for non-borrowing spouses can be complex; plan ahead and document carefully.
• Some condos or properties may not be eligible.

Heirs and your estate

When the loan becomes due, your heirs can repay the balance and keep the home, sell the property and use the proceeds to pay off the loan, or allow the lender to sell the home. Any remaining equity after repayment belongs to your estate.

Right-sizing with HECM for Purchase

If you’re 62 or older and ready to right-size, a HECM for Purchase lets you buy a new primary residence and finance part of it with a reverse mortgage. You bring cash to closing to cover the difference between the principal limit and purchase price. Your benefit is similar: no required monthly mortgage payment while you keep up with taxes, insurance, HOA dues, and maintenance.

Many South Shore homeowners use this to move closer to medical services, family, or coastal amenities, swap stairs for single-level living, or reduce maintenance while staying connected to their community.

Local checks before you apply

• Property taxes and exemptions: Talk with your city or town assessor about senior tax deferral or credit programs and how a reverse mortgage might interact with them.
• Flood zones and insurance: Coastal South Shore neighborhoods often require flood insurance. Maintaining all required insurance is an ongoing HECM obligation.
• Condo approval: Confirm whether your condo is FHA-approved for HECMs.
• HOA dues and assessments: You remain responsible for all association charges.
• Market value: Ask a local agent for current comps to understand how equity could change over time and how quickly a loan balance might grow relative to market conditions.

Steps and typical timeline

1. Complete required HUD-approved counseling to understand costs, benefits, and alternatives.
2. Select a lender and submit an application. The lender orders an appraisal and performs a financial assessment.
3. Review your disclosures and compare estimates. Ask questions until you’re confident in the terms.
4. Close and select your payout plan. Funds are disbursed per your chosen structure.
5. Keep up with property obligations and track annual statements.

Smart planning tips

• Clarify your goal first: income supplement, emergency reserve, debt payoff, or a home purchase.
• Compare payout options. For many, a line of credit offers flexibility and can preserve equity longer than a lump sum.
• Get multiple lender quotes and lean on the counselor’s guidance to understand fees.
• Involve family and your estate planner, especially if you want a spouse or heirs to keep the home.
• Check potential impacts on means-tested benefits and document any non-borrowing spouse protections.

When a reverse mortgage may fit

• You plan to stay in your South Shore home long term and want to fund accessibility upgrades or in-home support.
• You have significant equity and prefer no required monthly mortgage payment.
• You want a flexible line of credit for repairs and health needs that may arise over time.
• You’re 62 or older and ready to right-size using HECM for Purchase, without adding a monthly mortgage payment.

When to consider alternatives

• You’re age 60–61 and do not meet HECM age rules.
• You prefer lower upfront costs and can afford payments on a HELOC or home equity loan.
• You’re ready to sell and downsize without leveraging a reverse mortgage.

Get local, dignified guidance

If you’re exploring a reverse mortgage as part of a move or an aging-in-place plan, it helps to have an advisor who understands both financing and the realities of life-stage transitions. With senior-focused credentials (CSA, SRES, Certified Probate Expert, and NMLS reverse-mortgage credentialing), compassionate coaching, and hands-on coordination, our team can help you compare paths, connect with counseling, and align the decision with your bigger picture.

Start your next chapter with clarity. Schedule a conversation with Juli Ford to review your options and map out a plan that fits your South Shore life.

FAQs

What age qualifies for a HECM reverse mortgage?

• HECM borrowers must be 62 or older; if you’re 60–61, consider proprietary products or a HELOC and compare terms.

Will a reverse mortgage affect Social Security or Medicare?

• HECM proceeds don’t affect Social Security or Medicare eligibility, but they can impact means-tested benefits depending on use and local rules.

Do I still pay property taxes and insurance with a HECM?

• Yes. You must keep up with property taxes, homeowners insurance, HOA dues, and maintenance to remain in good standing.

Can I buy a new home using a reverse mortgage?

• Yes. HECM for Purchase lets qualifying buyers 62+ finance part of a new primary residence without a required monthly mortgage payment.

How much money can I get from a HECM?

• Your principal limit depends on the youngest borrower’s age, interest rates, and the lesser of your home value or the FHA lending limit.

What happens to the home when I pass away?

• The loan becomes due; heirs can sell the home to repay, refinance to keep it, or allow the lender to sell, with no debt beyond the home’s value.

Does a reverse mortgage reduce what I leave to my children?

• Often yes, because interest and insurance costs add to the balance over time; any remaining equity after repayment goes to your estate.