How a HECM mortgage works

The basics

A HECM lets homeowners 62+ borrow against home equity. Instead of monthly payments to a lender, interest and fees are added to the loan balance over time. The loan is repaid when the last borrower permanently leaves the home.

How much might be available?

The amount (called the principal limit) depends on the age of the youngest borrower or eligible spouse, current interest rates, and your home's value up to the FHA limit ($1,249,125 for 2026). Older borrowers and lower rates generally mean more is available. Try the educational estimator.

Ways to receive funds

• Lump sum (fixed-rate option)
• Monthly payments for a set term or for as long as you live in the home
• A line of credit; the unused portion of a HECM line of credit can grow over time
• A combination

Your ongoing responsibilities

• Live in the home as your primary residence
• Pay property taxes, homeowners insurance and HOA dues
• Keep the home in good repair

My simple 4-step process

1. 1

   A free, friendly conversation

   We talk about your goals, your home and your questions. No pressure and no obligation. Invite your family if you like.

2. 2

   HUD-approved counseling

   Before applying for a HECM you'll meet with an independent HUD-approved counselor. It's usually a phone call of about 30 minutes, and everyone on the title takes part. I'll give you a list of counselors and explain what to expect.

3. 3

   I handle the paperwork

   I gather documents, order the appraisal and coordinate with the lender, title and escrow. I'll keep you updated in plain words at every step.

4. 4

   Close and live comfortably

   We review every figure together before you sign. After closing, I'm still just a phone call away.

When the loan is repaid

When the last borrower sells, moves out permanently or passes away, the loan becomes due. The home can be sold and any remaining equity goes to you or your heirs. Heirs may also keep the home by repaying the loan, and with a HECM they never owe more than the home is worth. For deadlines, spouses and options for heirs, see what happens to a HECM mortgage when the owner dies.