For sons and daughters
Most of our best conversations include an adult child on the call. Here's what families ask us most, answered the way we'd want it answered for our own parents.
No. Your parent keeps the title. The lender records a lien, exactly as with the mortgage they may already have. As long as the home remains their primary residence and property taxes, insurance, and maintenance are kept current, they cannot be forced to leave because of the loan.
A HECM is a non-recourse loan. When the home is eventually sold, if the loan balance is higher than the sale price, FHA insurance covers the difference. Neither your parent nor the estate is ever billed for a shortfall.
The loan balance grows over time, so there is generally less equity left than if nothing had been borrowed. When the last borrower leaves the home, heirs can sell it and keep whatever remains after payoff, refinance it into a traditional mortgage to keep it, or simply hand back the keys with no further obligation. Families usually have around six months, with possible extensions, to decide.
The HECM program is a real FHA-insured product with strong consumer protections, including required independent counseling. Bad actors exist in every industry — which is why we invite the family into the conversation, put every number in writing, and never ask anyone to decide on the spot.
Reverse mortgage proceeds are loan advances, not income, so they don't affect Social Security or Medicare. Needs-based programs like Medicaid and SSI can be affected if funds sit in an account past month-end. If either applies, involve an elder law attorney or benefits specialist before drawing.
Sometimes that's the better answer, and we'll say so. Other options worth weighing: a HELOC, selling and right-sizing, family loans, or state property tax deferral programs. Compare them side by side before deciding.
Invite your parent, your siblings, and their financial advisor. We'll walk everyone through the same numbers at the same time.