Reverse Mortgage: What Is It? 

What is a Reverse Mortgage? To state it briefly, a reverse mortgage enables qualified homeowners, 62 and older, to convert part of the equity in their homes into cash without having to sell their home or take on a new monthly mortgage payment. When a homeowner has a reverse mortgage in place, the homeowner is required to continue to pay their insurance and taxes on the home and must live in and maintain the home as long as they live there. Reverse mortgages are aptly named because the payment stream is REVERSED. Instead of making a monthly mortgage payment to a lender as with a regular mortgage, the lender makes payments to YOU! Statistically, most seniors prefer to stay in their homes. A reverse mortgage may be a valuable tool in enabling the senior to do just that. At the same time, they will have funds for property taxes, insurance, utilities, and food. With this being said, there is a lack of clear information on the reverse mortgages. For this reason, it is critically important for seniors and their children to understand the benefits of this method of federally insured financing. Consider some of these common questions:

1-Will the lender own my home if take out a reverse mortgage?

No, the lender does not own the home. The homeowner holds the deed to the home.

2-Can a reverse mortgage affect my government benefits?

Generally, a reverse mortgage does not affect social security or Medicare benefits. We recommend homeowners consult their federal benefits administrators or financial advisors to determine what, if any, impact the reverse mortgage might have.

3- Are there restrictions on how reverse mortgage proceeds may be used? 

There are no restrictions! The cash proceeds from the reverse mortgage can be used for virtually any purpose. Many seniors have used the reverse mortgage to pay off debt, perform home repairs, help their kids, make ends meet, or have a financial reserve.

Seniors and family members should be educated as to all the pros and cons of reverse mortgages. They are not for everyone, but for the homeowners that can use this government-insured loan, it can be very helpful. 


Ed Morba (NMLS #19581) is an instructor in the real estate community. He educates New Jersey real estate agents for CE credits to ensure loan myths are put to rest. He has been providing financing as President of Family Home Funding Mortgage Corp. in Kinnelon, NJ for 30 years and is an expert on reverse mortgage lending. Ed is a Correspondent Mortgage Lender licensed by the NJ Department of Banking and Insurance and is the Founder and Owner of Family Home Funding Corp. If you have any questions, please don’t hesitate to reach out at, by giving us a call at (973) 283-8111, or by visiting our website at 

Family Home Funding Corp. is licensed by the NJ Department of Banking and Insurance as a Correspondent Residential Mortgage Lender. NMLS #207343. This is not an offer for an extension of credit or a commitment to lend. 

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