By George A. Downey

According to a summary of the recent JP Morgan “Guide to Retirement” from Shannon Hicks of HECM World, “the home equity in your primary residence may be used” as part of a long-term care or retirement income strategy, noting that credit availability and home value may fluctuate. While it doesn’t name reverse mortgages directly, this is an unmistakable nod to home equity conversion options, including Home Equity Conversion Mortgages (HECMs).
While JP Morgan stops short of naming reverse mortgages outright, the report frames home equity as a viable, if underutilized, financial tool. Financial advisors and retirees alike should take the next step by integrating reverse mortgage solutions into broader retirement discussions.
Reverse mortgages aren’t for everyone – they require careful evaluation of fees, longevity, estate goals, and eligibility. But for the right homeowner, at the right time, they can unlock dignity, flexibility, and peace of mind in retirement.
It’s time to stop thinking of home equity as a last resort and start seeing it for what it can be – a cornerstone of resilient retirement planning.
Why it’s important
Rising prices, volatile markets, longevity, and other risks threaten aging homeowners. Home equity, the largest asset of most, might provide a solution. Because home equity is not liquid, it is commonly overlooked as a financial resource. However, it could be through a reverse mortgage to increase and extend financial security without selling, moving, or taking on unwanted monthly payments.
Are HECM reverse mortgages safe?
The HECM reverse mortgage is protected by federal (HUD/FHA) insurance guaranteeing performance while the loan is in good standing. Then, regardless of what adverse conditions, if any, occur to the economy, financial markets, or real estate values, the loan terms and funding are guaranteed, even if the lender goes out of business.
Reverse mortgage benefits
• Improved cash flow: Monthly payments are not required.
• Increased liquidity: Withdrawals are received income-tax-free.
• Credit line growth: The undrawn balance of the credit line grows (compounds monthly).
• No maturity date: Repayment not required until no borrower resides in the property.
• Non-recourse loan: No personal liability.
• Protection against real estate and/or financial market declines.
• Guaranteed terms while good standing is maintained.
• Borrower obligations (to keep the loan in good standing) limited to:
• Keeping real estate taxes, homeowners’ insurance, and property charges current
• Providing basic home maintenance.
• Continuing occupancy as primary residence.
What to do?
Older homeowners should learn if they are eligible and how potential benefits might apply to their situation. While HECMs provide significant financial and other benefits for many, it may not be a suitable solution for others. Suitability requires thorough consideration of financial and non-financial considerations to assure suitability.
Consultation with a Certified Reverse Mortgage Consultant (CRMP) is recommended. CRMPs are exam tested, experienced, and bound by the National Association of Reverse Mortgage Lenders Association’s Code of Conduct and Professional Responsibility.
Other considerations. https://fred.stlouisfed.org/series/CSUSHPINSA

Eligibility requirements apply. HECM counseling is required. Subject to credit and income approval. You must occupy the residence as your primary home. You must continue to pay for property taxes, insurance payments, homeowners’ association fee, home maintenance costs, and other fees as required. You must have significant cash available for the down payment. The balance of the loan grows over time and interest is charged on the balance. The loan becomes payable when the last borrower on eligible non-borrowing spouse passes away, sells the home, permanently moves out, defaults on taxes, insurance, or maintenance, or otherwise does not comply with the loan terms. 

About the Author: George Downey, CRMP (NMLS ID 10239) is the Regional Senior Vice President of The Federal Savings Bank branch located at 100 Grandview Road, Suite 105, Braintree, MA 02184. Contact Mr. Downey at 781-843-5553 / Cell 617-594-3666 / gdowney@thefederalsavingsbank.com, www.thefederalsavingsbank.com/georgedowney