What is a Reverse Mortgage?
A reverse mortgage is a loan available to homeowners 62 years and older that allows them to convert part of their home equity into cash without selling their home or making monthly mortgage payments. The loan is repaid when the borrower moves out of the home permanently or passes away. Arizona's large retiree population makes reverse mortgages an important financial planning tool for seniors.
Reverse Mortgage Benefits
No Monthly Payments
Eliminate monthly mortgage payments while remaining in your home.
Access Home Equity
Convert home equity into cash for living expenses, healthcare, or other needs.
Stay in Your Home
Continue living in your home as long as you maintain the property and pay taxes and insurance.
Non-Recourse Loan
You or your heirs will never owe more than the home's value when the loan is due.
Tax-Free Proceeds
Reverse mortgage proceeds are generally not considered taxable income.
FHA Insurance Protection
HECM loans are insured by FHA, providing additional borrower protections.
Types of Reverse Mortgages
HECM (Home Equity Conversion Mortgage)
- • FHA-insured reverse mortgage
- • Most common type (90%+ of market)
- • 2024 limit: $1,149,825 in Arizona
- • Borrower protections and safeguards
Jumbo Reverse Mortgages
- • For high-value Arizona properties
- • Loan amounts above HECM limits
- • Up to $4 million+ available
- • Private lending products
HECM for Purchase
- • Buy a new home with reverse mortgage
- • Downsize or relocate to Arizona
- • No monthly mortgage payments
- • Single closing transaction
Reverse Mortgage Eligibility
Age Requirements
- • Minimum Age: 62 years old
- • Multiple Borrowers: Youngest spouse must be 62+
- • Non-Borrowing Spouse: Under 62 spouse protections available
- • Age Impact: Older borrowers can access more equity
Property Requirements
- • Primary Residence: Must be borrower's main home
- • Property Types: Single-family, 2-4 unit, condo, townhome
- • Manufactured Homes: Eligible if meets FHA standards
- • Property Condition: Must meet FHA standards
Financial Requirements
- • Home Equity: Substantial equity required
- • Existing Mortgage: Must be paid off or have low balance
- • Financial Assessment: Ability to pay taxes and insurance
- • Counseling: HUD-approved counseling required
How You Can Receive Funds
Lump Sum
Receive all available funds at closing in one payment
Monthly Payments
Receive fixed monthly payments for a set period or life
Line of Credit
Access funds as needed with a growing credit line
Combination
Mix of monthly payments and line of credit access
Arizona's Senior-Friendly Environment
Retiree Destination
Arizona attracts retirees nationwide with warm climate, lower cost of living, and senior-friendly communities.
Property Appreciation
Strong Arizona property values provide substantial home equity for reverse mortgage qualification.
Active Adult Communities
Numerous 55+ communities throughout Arizona provide ideal settings for reverse mortgage borrowers.
Reverse Mortgage Costs
Upfront Costs
- • Origination Fee: 2% of first $200,000 + 1% of amount above
- • FHA Mortgage Insurance: 2% of appraised value
- • Appraisal: $400-$800 typically
- • Counseling: $125-$200 for required session
- • Title and Escrow: Varies by location
Ongoing Costs
- • Interest Rate: Adjustable or fixed rate options
- • Annual MIP: 0.5% of outstanding balance
- • Servicing Fee: Up to $35 monthly (if applicable)
- • Property Taxes: Borrower responsibility
- • Homeowner's Insurance: Borrower responsibility
Borrower Responsibilities
Property Maintenance
- • Keep home in good repair
- • Meet FHA property standards
- • Perform necessary maintenance
- • Address safety and security issues
Financial Obligations
- • Pay property taxes when due
- • Maintain homeowner's insurance
- • Pay HOA fees (if applicable)
- • Keep flood insurance (if required)
Occupancy Requirements
- • Live in home as primary residence
- • Cannot be absent for 12+ consecutive months
- • Notify servicer of extended absences
- • Maintain legal ownership
When the Loan Becomes Due
Maturity Events
- • Last borrower moves out permanently
- • Last borrower passes away
- • Home is sold or transferred
- • Borrower fails to meet loan obligations
- • Property is no longer primary residence
Repayment Options
- • Sell the home to repay the loan
- • Refinance with traditional mortgage
- • Pay off loan with other funds
- • Heirs can keep home by paying loan balance
- • Deed in lieu if owing more than value
Reverse Mortgage Process
Initial Consultation
Discuss your needs and reverse mortgage options
HUD Counseling
Required independent counseling session
Application
Complete loan application and documentation
Appraisal
FHA appraisal determines home value
Underwriting
Loan approval and final terms
Closing
Sign documents and receive funds
Arizona Cities We Serve
Our reverse mortgage services are available throughout Arizona:
Related Financial Planning Services
Ready to Explore Reverse Mortgage Options?
Discover how a reverse mortgage can provide financial freedom in your Arizona retirement. Schedule a consultation to learn if a reverse mortgage is right for you.
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