Reverse mortgages have carried a negative reputation for years, especially among Christians who are cautious about debt. But as with any financial tool, faithful stewardship calls us to understand how it works before deciding whether it belongs in a financial plan.
Harlan Accola leads the reverse mortgage team at Movement Mortgage, a FaithFi underwriter. He joined the show today to explain why reverse mortgages remain controversial, how today’s Home Equity Conversion Mortgage (HECM) differs from older products, and when it might play a useful role in retirement planning.
Why Are Christians Hesitant About Reverse Mortgages?
For many believers, the hesitation begins with debt itself. Scripture repeatedly encourages wisdom, contentment, and caution in financial matters, so borrowing against a home's equity can feel contrary to good stewardship.
There is also the lingering reputation of earlier reverse mortgage products. Many people remember stories involving high costs, confusing terms, or homeowners facing difficult circumstances later in life.
Accola says those concerns are understandable. “I felt the same way in the past before I understood them,” he said.
But he argues that many people are evaluating today’s federally insured reverse mortgages based on older versions of the product—or confusing them with other home-equity arrangements that work very differently.
That makes it important to understand exactly which product is being considered and how its protections, costs, and obligations work.
What Is a HECM?
The most common type of reverse mortgage is the Home Equity Conversion Mortgage, or HECM, which is insured by the Federal Housing Administration.
Unlike a traditional mortgage, a HECM generally does not require the borrower to make monthly principal and interest payments. Instead, the loan balance typically grows over time and becomes due when the borrower no longer occupies the home as a principal residence, sells the property, or dies.
The homeowner still retains ownership of the home and remains responsible for obligations such as property taxes, homeowners insurance, and property maintenance.
HECMs also include protections designed specifically for older homeowners. Borrowers must complete independent counseling before obtaining the loan, and the loans are non-recourse, meaning the borrower or heirs generally will not owe more than the home's value when the loan is repaid.
Certain eligible non-borrowing spouses may also be able to remain in the home after the borrowing spouse dies, provided they meet program requirements.
Those features make today’s HECM significantly different from some of the products that contributed to reverse mortgages’ poor reputation in earlier decades.
Turning Home Equity Into Retirement Flexibility
For many retirees, a home represents one of their largest assets. Yet that wealth is often difficult to use without selling the property or taking on more debt.
A reverse mortgage can potentially convert a portion of that equity into accessible funds.
One possible benefit is improved monthly cash flow. Eliminating a required mortgage payment could help a retiree living on reduced income balance a budget without turning to credit cards or other higher-cost borrowing.
Reverse mortgage proceeds may also provide additional resources for expenses such as home repairs, healthcare, or long-term care.
A HECM line of credit can offer another form of flexibility. For example, retirees may be able to draw from home equity during a market downturn rather than selling investments after they have declined in value. Used carefully, that could give an investment portfolio more time to recover.
Home equity might also help preserve
