For those 62 years and older, reverse mortgages are becoming more popular, as buyers like the financial freedom they provide.

While the benefits to Reverse Mortgages are many, the one that grabs headlines is that with the right amount of money down, they offer the opportunity to never have to pay a mortgage payment again.

Heidi Riddles, co-owner of Exponent Mortgage in Frisco, said more customers over 62 are falling in love with Reverse Mortgages.


“It’s an awesome loan for people who want to downsize,” she said. 

How they work

Reverse Mortgages don’t require a monthly payment and allow someone to borrow against their home’s equity.

Credit and work history aren’t weighted so heavily with Reverse Mortgages, Riddles said.

"What’s most important is showing that a buyer can cover the property taxes and insurance costs of the home," she said.

When buying a home with a Reverse Mortgage, the buyer puts a percentage down to qualify for the loan and that percentage amount is dependent on the borrower’s age. The older you are the less the percentage amount will be.    

The biggest question Riddles gets about Reverse Mortgages is what happens if someone passes away? 

“Whoever would inherit the home would have 6 months to either refinance the mortgage out of the Reverse Mortgage or sell the home,” she explained.

Heirs are only be responsible for the loan balance, just as they would be on a traditional loan.

Reverse Mortgages are typically handled directly with brokers who are experienced in handling these types of loans.

“It’s not your conventional loan,” Riddles said. “It’s one of the values you get when you work with a mortgage broker.”

Then there’s Reverse Mortgage refinance. If someone wants to do a Reserve Mortgage refinance cash out to tap into the equity of their home, they can do this by receiving a lump sum of money in a one-time cash out or have it distributed over two years without having a monthly mortgage. 

Riddles said the most popular option is to draw off of the equity and set up payment installments. This option is great for people on limited incomes.

You can take $1,000 a month, for example, and have it deposited into your bank account. It provides the homeowner extra money for living expenses.

“You earn interest on the money you don’t draw from the line of credit and only pay interest on what you do”, said Riddles

Interest is building

Riddles said she is seeing more and more buyers interested in Reverse Mortgages.

“Within the last year they have become much more popular,” she said. “And that’s probably because the housing market has changed so drastically.” 

Riddles shared the story of a woman she worked with who was able to create her dream home through a Reverse Mortgage.

“One woman who never had the funds to do any upgrades to her home, was able to move forward with things she wanted to do in her home through this kind of program and that’s really awesome,” she said.

More advice from Heidi Riddles

All of the reasons why working with a mortgage broker gives you a leg up in the homebuying process

This financing option is giving cash-only buyers in DFW money back and long-term flexibility

Can you actually get a loan by putting less than 20 percent down? The answer may surprise you.