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Yes Virginia, it IS True!

As my mother told me: if it sounds too good to be true, it probably is. I know this thought jumps into your head when you start to read about a Home Equity Conversion Mortgage – ‘free’ money from my home with no monthly payment???? If you are 62 or over, you may have just found the goose that laid the golden egg.

A reverse mortgage is exactly what the name implies. Rather than you paying a monthly payment to a bank, the bank pays you. The requirements are simple:

You must be at least 62, live in and own your home plus have a bit of equity. The lender will have your property appraised to determine its true market value and this will determine, along with your age, how much money you can receive from your house.

 There are no income restrictions or qualifications. Reverse mortgages are not considered income, therefore they are tax free. They do not affect your social security benefits or your Medicare entitlements. You continue paying your property taxes and your homeowners insurance and keep living in the home as your principal residence.

This tool called reverse mortgage is actually a loan, hence an interest rate. This means nothing is really "free". It does however, allow senior homeowners to convert part of their equity into cash without having to sell their home. Because it is a loan, you are receiving money and not paying a monthly payment as long as you continue to live in your home as your primary residence. Interest is added to your balance and paid back when the house is sold.

This loan must be repaid at some point. It is eventually repaid with interest should you sell, pass away, or no longer live there as your principal residence. You remain responsible to pay real estate taxes, homeowners insurance and maintenance expenses which you would have to pay with or without any kind of a mortgage.

With this explanation, the picture becomes clearer, right? You enjoy financial independence, tax free and not repayable until a date sometime in the future, all while remaining in your home. This is as close to a win‐win situation as one can get in this day. It is easy to see that anyone who is cash‐poor, but house‐rich, should at least look into this program and see how it works for them. There is nothing to lose by asking questions

The typical reverse mortgage is called a Home Equity Conversion Mortgage or HECM (pronounced HEK‐UM). The federal government through the Department of Housing and Urban Development (HUD), insures these loans. They have no income or credit qualifications and the money can be used for any purpose.

HECMs also require all applicants to meet with an independent housing counselor from a HUD‐approved housing counseling agency. An additional benefit of a HECM mortgage is the following: should a borrower have to move out of his or her home and into a nursing home or other medical facility, they have up to 12 months before the loan starts to become due. This enhances financial planning greatly. As always, make sure you check with your trusted advisors for more information.

Do you have questions? Please write them down here while you are thinking about them and give us a call. We will make sure you get your questions answered promptly!


 Contact our team of Reverse Mortgage Specialists and let us provide a complimentary consultation.  We will explain in detail exactly how the loan works, see what options may be available to you, and answer any questions that you or your loved ones might have.


FirstBank Mortgage Hotline:  (877) 865-6706.


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FirstBank is a long standing member of and holds A+ rating from the BBB. We are subscribing members of the National Reverse Mortgage Lenders Association (NRMLA), and we are an approved direct lender with the US Department of Housing and Urban Development (HUD).

3500 Blue Lake Drive, Ste. 325 

Birmingham, AL 35243 
205-503-4188 | 800-200-6462