What is a Reverse Mortgage?

According to a survey by the American Association of Retired Persons (AARP), almost 90% of senior homeowners would prefer to age in the familiarity and comfort of their own homes.  This is not surprising, as many seniors have built their lives around their home.  Fortunately, a majority of seniors have also built equity in their homes, having diligently paid their mortgage every month for the last few decades.  Because of this, many seniors over the age of 62 will be eligible for a retirement planning loan product called a reverse mortgage.

Reverse mortgages have already helped thousands of seniors across the country to continue living in their homes for the rest of their lives, all while receiving their equity without having to pay a monthly mortgage payment, as long as all loan terms are met.  Reverse mortgages have been gaining popularity in the last half century, but for many years before, senior homeowners had a hard time finding the solution that would let them access their home’s equity while still living there.

The History of Reverse Mortgages

Before reverse mortgages were first offered in 1961, senior homeowners had very few options if they wanted to access their equity.  Liquidating equity usually meant having to sell the home and move out, thus defeating the purpose of aging in place.  However, the idea of a loan for this purpose gained traction at a congressional meeting in 1969, when the Senate Committee on Aging expressed interest in “an actuarial mortgage plan that would allow homeowners to stay in their homes while enjoying their saved home equity.”

Interest in this product only continued to grow.  In 1987, Congress passed an insurance bill called the Home Equity Conversion Mortgage Demonstration, which became the reverse mortgage pilot program.  The following year, President Ronald Reagan signed the Reverse Mortgage Bill into law.

What is a Reverse Mortgage Today?

Since then, reverse mortgages have continued to evolve.  There are multiple kinds of reverse mortgages, including the federally-insured Home Equity Conversion Mortgage (HECM).  There is also the HECM for Purchase, which is the version that helps senior homeowners accomplish, in just one transaction, the closing of a reverse mortgage along with the purchase of a new home that is more suited to their needs.

Today, when a borrower works with a reputable reverse mortgage lender to close a loan, they are provided with a personal reverse mortgage professional to cater to their needs in the loan process.  This expert will use their experience to serve as a knowledgeable resource who will ensure that the reverse mortgage process goes smoothly.  For many senior homeowners, reverse mortgages of today are providing them with a solid retirement.

Who is Right for a Reverse Mortgage?

Reverse mortgages are designed for senior homeowners ages 62 years and older who own their home and live there as their primary residence.  Although it may not be right for everyone, reverse mortgages can be the perfect solution for many.  Is a reverse mortgage right for you?  It may be if:


  • You want to access your equity while aging in your home
  • You plan to live in your home as your primary residence
  • You want to pay off your existing mortgage, your credit card bills, or any medical expenses
  • You want to eliminate a monthly mortgage payment
  • You need to tap into your equity now
  • You want to continue your financial independence
  • You want a line of credit for emergencies
  • You are confident in your ability to continue payments of property taxes and homeowners insurance

With all the benefits a reverse mortgage offers, it is not hard to see why this loan product has grown so popular since its beginnings in the early 1960′s.  To learn if a reverse mortgage would be right for you, it is most helpful to speak with a reverse mortgage professional.  These experts can answer questions you have that are particular to your situation.  If you determine a reverse mortgage is right for you, you can begin to take advantage of a loan product that is already helping many senior homeowners achieve a financially comfortable retirement.


“The History of the Reverse Mortgage.”  www.AAG.com.  NP.  ND.  Web.  20 July 2015.  https://www.aag.com/news/history-reverse-mortgage

Lim, Alberta.  “Debunking Myths about Reverse Mortgages.”  Equities.com.  18 June 2015.  NP.  Web.  1 July 2015.  http://www.equities.com/editors-desk/personal-finance/real-estate/debunking-myths-about-reverse-mortgages

“What is a Reverse Mortgage?”  FamilyMoneyValues.com.  19 March 2015.  NP.  Web.  1 July 2015.  http://blog.familymoneyvalues.com/2015/03/what-is-a-reverse-mortgage/

“The Truth About Reverse Mortgages.”  Thousandnaire.com.  ND.  NP.  Web.  1 July 2015.  http://www.thousandaire.com/the-truth-about-reverse-mortgages/

“Do I Qualify for a Reverse Mortgage?  The Questions You Should Ask and the Requirements You Need to Know.”  Homefinder.com.  ND.  NP.  Web.  1 July 2015.  http://www.homefinder.com/research/reverse-mortgage-requirements

About American Advisors Group

American Advisors Group is the nation’s leader in reverse mortgage lending, and is dedicated to helping American seniors convert a portion of their home equity, a largely untapped asset, to help fund their retirement needs.  To check how much you may receive from a reverse mortgage, visit https://www.aag.com/reverse-mortgage-calculator/ for the American Advisors Group Reverse Mortgage Calculator.

American Advisors Group holds an A+ rating by the Better Business Bureau, has a 97% customer satisfaction rating and is a proud member of the National Reverse Mortgage Lenders Association (NRMLA). To learn more about American Advisors Group and reverse mortgages, please visit the company’s website at www.aag.com.

Author’s Bio

Alberta Lim is the Digital Content Writer for American Advisors Group, the #1 Reverse Mortgage company in the nation. Writing content for the company’s website, news and updates, and newsletters, plus being surrounded by the top Reverse Mortgage Professionals in the industry, means that she is no stranger to Senior Retirement Planning and Living.