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A reverse mortgage is a loan secured by your home—not free money or a government benefit. With a Home Equity Conversion Mortgage (HECM), an eligible homeowner generally keeps title, but must continue meeting occupancy, tax, insurance and maintenance requirements. Interest and fees are added to the balance, which can reduce equity over time.
This guide addresses the questions homeowners in Cape Cod, Plymouth, Norfolk and Bristol counties commonly ask before speaking with Eric Steenstra or another adviser. No official source supplied for this article verifies Steenstra’s Massachusetts license, FHA approval, lender affiliation or availability in those counties; verify any adviser independently through Massachusetts licensing records and HUD’s counselor and lender directories.
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What is a reverse mortgage?
An HECM is a federally insured reverse mortgage generally available to homeowners age 62 and older who meet the program’s property and occupancy rules. Instead of making a monthly payment to a lender, the borrower may receive funds through an available payment option, while the loan balance grows.
The borrower remains the owner. The home must remain the principal residence, and the borrower must keep required property charges current and maintain the property. HECMs are insured by the Federal Housing Administration (FHA) and require counseling from a HUD-approved agency before closing.
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Other reverse mortgages exist, including proprietary products offered by private lenders and single-purpose programs offered for restricted uses. Their eligibility rules, insurance, costs, rates and payment choices can differ substantially.
Does the bank own my home?
Myth: Taking a reverse mortgage transfers ownership to the lender.
Fact: Title generally stays with the borrower. The lender has a mortgage lien, just as with a traditional home loan. Ownership does not eliminate the duties tied to the property. Failure to meet those duties can put the loan in default and lead to foreclosure.
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Myth: The proceeds are a benefit that never has to be repaid.
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Fact: The Consumer Financial Protection Bureau (CFPB) states: “A reverse mortgage is a home loan, not a government benefit.” Cash received, interest and fees are added to the balance over time. As the balance rises, the homeowner’s equity generally falls.
That structure can be useful for some retirement plans, but it is not risk-free. Advertising that presents a reverse mortgage as a costless solution can hide the effect of accumulating charges, reduced equity and the eventual repayment obligation.
Can I stay in the home forever without conditions?
Myth: A reverse mortgage guarantees permanent occupancy regardless of what happens.
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Fact: Repayment is generally triggered when the home is sold, the borrower moves, or the last borrower dies. The loan can also become due after a qualifying default, such as unpaid property charges, failure to maintain the home or loss of principal-residence status.
What if I move to assisted living?
A move to assisted living may mean the home is no longer the borrower’s principal residence. Because that status is a condition of the loan, notify the servicer before moving and ask how the proposed arrangement affects the loan. Do not assume that leaving personal belongings at the property preserves eligibility.
Do I still pay property taxes, insurance and upkeep?
Yes. The borrower remains responsible for property taxes, homeowners insurance, other required charges and reasonable maintenance. A reverse mortgage does not automatically pay these bills. Set aside a reliable source of funds for them and keep records of payments.
Failure to pay taxes or insurance, or allowing the property to deteriorate, can create a default even when the borrower has received loan proceeds. A lender may require a set-aside or another payment arrangement in some circumstances; the terms must be reviewed in the loan documents and current disclosures.
Will my heirs automatically lose the house?
Myth: A reverse mortgage means heirs receive nothing.
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Fact: When the last borrower dies, heirs generally can repay the balance, sell the home or pursue another resolution allowed by the loan and applicable rules. The growing balance can reduce the equity available to inherit.
For an HECM, the borrower or estate generally will not owe more than the home’s value. That protection does not preserve a specific amount of inheritance: if the balance has grown close to the property’s value, little or no equity may remain after repayment and selling costs.
Are all reverse mortgages the same?
No. Compare the product type and the obligations, not just the amount available at closing.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minute| Decision factor | HECM | Proprietary reverse mortgage | Single-purpose program |
|---|---|---|---|
| Insurance | FHA-insured | Federal insurance is not established by the product category | Federal insurance is not established by the product category |
| Typical eligibility | Generally age 62 or older, with qualifying property and principal-residence requirements | Set by the private lender; age, property and loan-size rules vary | Set by the sponsoring agency; availability and eligibility vary |
| Use of proceeds | Uses allowed by the program and borrower’s plan | Uses set by the lender and contract | Usually restricted to a specified purpose |
| Rates and fees | Borrower- and time-specific; review current disclosures | Borrower- and lender-specific; exact figures not stated here | Program-specific; exact figures not stated here |
| Payment choices | May include a lump sum, monthly advances or a line of credit, subject to program terms | Varies by lender | Varies by program |
| Counseling | HUD-approved counseling required before the loan | Requirement depends on the product and jurisdiction | Requirement depends on the program |
| Repayment and heirs | Generally due after sale, move, death of the last borrower or qualifying default; HECM nonrecourse protections apply | Read the contract for repayment and nonrecourse terms | Read the program rules for repayment and estate effects |
Ask for the principal limit, interest-rate structure, upfront and ongoing fees, servicing terms and payoff examples in writing. Exact rates, limits and fees change and should be confirmed in current disclosures rather than assumed from an advertisement.
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Is counseling optional?
For an HECM, no. The borrower must receive counseling from a HUD-approved agency before receiving the loan. A useful session should explain costs, how the balance can grow, property-charge obligations, effects on spouses and heirs, and alternatives. Counseling is intended to be independent of the lender’s sales process; use HUD’s counselor and lender search tools to locate and verify providers.
How should I decide whether a reverse mortgage fits?
- Estimate how long you expect to remain in the home. A planned move can make a long-term reverse mortgage expensive or impractical.
- Stress-test property charges. Confirm that taxes, insurance, utilities and maintenance can be paid reliably even if other income changes.
- Check benefit and tax effects. Ask a qualified benefits or tax professional how proceeds and account balances could affect your situation; do not assume loan proceeds are invisible to every program.
- Protect a non-borrowing spouse. Ask what happens if a spouse is not named as a borrower and obtain the answer in the closing documents.
- Discuss the heirs’ preference. Decide whether the family would want to keep, sell or repay for the property and how a growing balance affects that plan.
- Compare alternatives. The FTC identifies home-equity borrowing, refinancing and downsizing, along with reverse-mortgage options, as alternatives to evaluate. Compare total costs, flexibility, repayment timing and the equity left for heirs.
- Use independent counseling and review the disclosures. Do not sign until you understand the rate, fees, payment plan, occupancy rules, default triggers and payoff process.
What should local homeowners verify about an adviser?
Before relying on a person’s local marketing, verify the individual’s Massachusetts license status, the company’s authorization, any FHA or lender relationship and whether service is actually available in Cape Cod, Plymouth, Norfolk and Bristol counties. HUD approval of a counseling agency does not endorse a private adviser. Massachusetts consumer guidance cautions that reverse mortgages can help some older homeowners but can also jeopardize retirement when used carelessly.
The practical answer to the myths
You keep title, but you borrow against the home and must meet continuing obligations. The balance usually grows, equity can shrink, and repayment is tied to a sale, move, death or qualifying default. HECM counseling and a written comparison with other borrowing or downsizing options are essential before deciding.
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