$508,258. This is the average home value in Boise as of June 30, 2026, according to Zillow. This figure represents a 0.9 percent increase from a year ago, and it signifies more than just rising home prices. For homeowners approaching retirement, it also means that their equity in the home has significantly increased. A recent client who sought advice was concerned about how to utilize this equity, worrying that doing so might leave nothing for their children.

A reverse mortgage is a product that allows homeowners aged 62 and older to borrow against the equity in their home. Unlike a traditional mortgage, which requires monthly payments, a reverse mortgage provides funds in a lump sum, monthly payments, or a line of credit, or a combination of these options. The principal and interest are settled when the home is sold, the owner passes away, or the home is no longer used as the primary residence. The most commonly used type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA) and is the only type of reverse mortgage backed by the federal government.

Conditions can vary even within Boise, depending on the neighborhood. Areas near downtown or in emerging development zones have seen significant price increases recently, while outer regions have shown more moderate trends. However, property tax burdens in Idaho are relatively low compared to the national average. The average effective property tax rate in Idaho is about 0.49 to 0.5 percent, which is among the lower rates in the country. This can be advantageous since property taxes and insurance premiums must still be paid after obtaining a reverse mortgage.

It is essential to understand the structure of this product accurately. Initial costs, such as origination fees and mortgage insurance premiums (MIP), tend to be higher than those of traditional mortgages. MIP is initially around 2 percent and approximately 0.5 percent annually. When closing costs are added, the initial expenses can be significant. Additionally, as funds are drawn, the homeowner's equity decreases over time. The concern that the client had about leaving assets for their children is indeed an inherent characteristic of this product.

On the flip side, there are advantages to consider. It allows for cash flow to cover living expenses and medical costs without monthly repayment burdens, and HECM is structured as non-recourse, meaning that if the home value falls below the loan balance, heirs are not required to pay the difference due to FHA insurance. In other words, the risk of declining home values is absorbed by the lending institution and the federal government.

Eligibility requirements must also be checked. Applicants must be at least 62 years old, the home must be their primary residence, and if there is an existing mortgage, it must be at a level that can be paid off with the reverse mortgage funds. A financial assessment must also be passed to ensure the ability to continue paying property taxes and insurance. It is crucial to remember that failing to pay these after passing the assessment can lead to a risk of default. Notably, as of 2024, 17.7 percent of Idaho's population is projected to be 65 or older, with this age group expected to increase by 30.7 percent by 2031, indicating that more neighbors will likely face these considerations in the future.

The method of receiving funds should also be considered in advance. A lump sum is useful for significant medical expenses or remodeling, while monthly payments are better for supplementing fixed living expenses. The line of credit option allows for withdrawal only when needed, with unused limits increasing over time. Regardless of the chosen method, it is essential to keep in mind that the fundamental structure involves drawing against the home equity.

Before applying for HECM, applicants must undergo mandatory counseling from a HUD-approved counseling agency. Since reverse mortgage scams targeting seniors do exist, it is advised not to rush into decisions without proper counseling and discussions with family. This is not investment or legal advice, and it is recommended to consult with professionals before entering into any contracts.