The short version
A reverse mortgage lets a homeowner 62 or older borrow against their home equity and stop making a monthly mortgage payment. The loan doesn't come due until the last borrower sells, moves out for good, or passes away. You still own the house, and you still pay property taxes, insurance, and upkeep.
The most common one is a HECM — a Home Equity Conversion Mortgage, insured by the federal government through FHA. In a county where a lot of retirees are house-rich and cash-tight, it can be a genuinely good tool. It can also be an expensive one used for the wrong reason. I'll walk you through both sides so you can tell where you land before anyone starts filling out an application.
What is a reverse mortgage, plainly?
Flip a normal mortgage around. On a regular loan, you send the bank money every month and your balance goes down. On a reverse mortgage, the lender can send you money — or open a line you draw from — and the balance goes up over time as interest accrues. Nothing is due monthly. The whole thing gets settled later, out of the home's value.
You keep the title. The bank does not own your house, and there's a common fear that they take it — they don't. When the loan ends, the house is sold or the heirs pay off the balance, and whatever equity is left over belongs to you or your estate. Because a HECM is FHA-insured, it's also non-recourse: if the balance ever grows past what the home sells for, neither you nor your heirs owe the difference. The FHA insurance covers the gap. That protection is a big part of why I steer people toward the HECM over most private reverse products.
How do you actually receive the money?
This is where a reverse mortgage gets more flexible than people expect. You're not forced to take a giant lump sum. How you draw the money changes what it costs you and how long it lasts, so it's worth understanding the options before you pick one.
The line-of-credit option is the one I point most people to, and it has a feature that surprises folks: the unused portion grows over time. The available credit isn't frozen at today's number — it increases, which can matter a lot if you're setting this up as a safety net for later rather than cash you need this week.
- Line of credit — draw only what you need, when you need it, and the unused amount grows over time.
- Monthly payments — a set amount every month for a fixed term or for as long as you live in the home.
- Lump sum — the full available amount up front, usually at a fixed rate (this one carries the most interest cost).
- A combination — for example, pay off an existing mortgage and keep the rest as a standby line.
Who qualifies, and what does the house have to be?
The rules are less about your income and credit than a normal loan and more about age, equity, and the property itself. The youngest borrower on title has to be at least 62. The older you are, the more of your equity you can access, because the loan is built around life expectancy.
You need substantial equity — ideally the home is paid off or close to it. If you still owe on a mortgage, the reverse mortgage has to pay that off first, and there has to be enough left to make it worthwhile. The home generally must be your primary residence, and it has to be a HECM-eligible property type: most single-family homes and many condos and FHA-approved townhomes qualify. There's also a financial assessment — the lender checks that you can realistically keep up with property taxes and homeowners insurance, because falling behind on those is the fastest way a reverse mortgage goes bad. And before you can even apply, HUD requires you to complete counseling with an independent, HUD-approved counselor. That step is there to protect you, and honestly, it's a good filter.
The Sonoma County angle: high equity, high stakes
Here's why this comes up so often locally. A lot of people who bought in Santa Rosa, Sebastopol, or Sonoma decades ago are sitting on homes worth well over a million dollars with no mortgage. On paper they're wealthy. In the checkbook, they're living on Social Security and a modest pension and watching insurance premiums climb. That gap — big equity, tight cash flow — is exactly the situation a reverse mortgage was designed for.
There's a wrinkle specific to high-value markets, though. A standard HECM is capped by an FHA lending limit, so if your home is worth well above that limit, a regular HECM only lets you tap up to the cap — you can't reach the equity above it with that product. In a county where seven-figure homes aren't rare, that ceiling matters, and it's why proprietary (private) reverse mortgages, sometimes called jumbo reverse mortgages, exist for higher-value homes. They can unlock more, but they're not FHA-insured, so the protections differ. I look at both when a home's value is high, and I tell clients plainly where the trade-offs land.
The other Sonoma County reality: insurance. Wildfire risk has pushed homeowners premiums way up here, and some carriers have pulled back. Since keeping insurance in force is a condition of any reverse mortgage, I make people run their actual current premium into the plan — not last year's number. It changes how much cushion you really need.
Where reverse mortgages go wrong
I'd rather talk you out of a bad one than sell you a good-looking one. There are real downsides, and the people who get burned usually ignored them going in.
The costs are front-loaded. Between the FHA insurance premium, origination fee, and closing costs, a HECM is not cheap to set up — which is why it's a poor fit if you might move in a couple of years. Spread over a short stay, those costs are brutal; spread over fifteen years in the home you love, they're reasonable. The balance also compounds, so the equity you leave to your kids shrinks over time — that's fine if you've talked to your family and everyone's on the same page, and a source of ugly surprises if you haven't. And the fastest way to lose the house is to stop paying property taxes or let the insurance lapse, because those are still your responsibility. If any of that makes you wince, a reverse mortgage may not be your answer, and I'll help you look at a HELOC, downsizing, or other options instead.
- High upfront costs — a bad trade if you'll leave the home within a few years.
- The balance grows and eats into the equity your heirs would inherit.
- You must keep paying property taxes, insurance, and maintenance, or risk default.
- It can affect need-based benefits like Medicaid (Medi-Cal) if the money isn't handled right — coordinate with an advisor.
- Some private jumbo reverse products lack FHA's non-recourse protection — read those carefully.
Why talk to a broker before you commit?
Reverse mortgages attract aggressive marketing — the celebrity TV spots, the mailers dressed up to look like government notices. That noise is exactly why you want someone whose job is to represent your deal, not push one company's product. As a broker, I can compare a standard HECM against a jumbo reverse for a high-value Sonoma County home and tell you which one actually serves your goal, or tell you that neither does.
And that last part is the point. Plenty of times I've run the numbers with someone and concluded a reverse mortgage wasn't the right move — and said so. If it does fit, I'll structure the draw to keep costs down and the safety net intact. Either way you get a straight answer, and your family gets brought into the conversation instead of finding out later.