When consulting in Tacoma, it's noticeable that home prices can vary significantly even within the same city. A client with an older home in the North End was most curious about how much asset would be left to pass on to their children. The answer changes with a reverse mortgage. The amount of equity remaining depends on how much and how long the loan is used, which can vary as much as the neighborhood market values. This is why it's important not to assume everything is the same just because it's the same city.

A reverse mortgage is a product that allows homeowners aged 62 and older to receive funds using their home equity as collateral. Unlike a traditional mortgage where payments are made monthly, the lending institution pays the owner in a lump sum, monthly payments, or a line of credit. 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 HECM, insured by the FHA, is the only type widely used that is backed by the federal government.

The median home price in Tacoma is $485,000 as of March 2026 (according to Houzeo). However, the situation varies depending on the neighborhood. There is a difference in the available equity between older, higher-value neighborhoods like the North End and relatively cheaper areas. It's also important to note that the effective property tax rate in Pierce County, where Tacoma is located, is about 1.02 percent of the property value (according to tax rates data), which is somewhat higher than in King County. If you are not accurately aware of the neighborhood market values, the appraisal stage may yield lower than expected results.

To summarize the eligibility requirements, they are as follows:

• You must be at least 62 years old.
• The home must be your primary residence.
• If there is an existing mortgage, it must be at a level that can be paid off.
• You must pass a financial assessment to ensure you can continue to pay taxes and insurance.

If you meet the requirements, you can create cash flow for living expenses or medical costs without monthly repayment burdens. Since it is a non-recourse structure, heirs are not required to pay the difference if the home value falls below the loan balance later on.

The ways to receive funds can be as varied as the neighborhood circumstances. You can choose to receive a fixed amount monthly, receive funds for a set period, use a line of credit as needed within a limit, or combine these methods. The right method depends on your spending patterns and how much you want to leave to your children, so it's advisable to get estimates from multiple lenders before applying to compare fees and terms.

If you are concerned about leaving assets to your children, this aspect needs careful consideration. Over time, the loan balance accumulates while the equity decreases. Especially for homes in neighborhoods with relatively lower market values, you need to closely monitor the rate at which equity diminishes. When you add origination fees and mortgage insurance (initially about 2 percent, then 0.5 percent annually), along with closing costs, the initial costs can be higher than a traditional mortgage. The obligation to maintain the property also remains with the owner during the loan period. If you cannot continue to pay property taxes and insurance, there is a risk of losing the home due to default.

As of 2024, the percentage of the population aged 65 and older in Washington State is 17.3 percent (according to America's Health Rankings). Given the significant differences in neighborhood market values, it's essential to first accurately assess the actual value of your home's neighborhood. It's safer to keep a distance from unsolicited reverse mortgage offers made through door-to-door sales or phone calls, and you can verify lender eligibility on the HUD website. Before applying for HECM, you must undergo mandatory counseling with a HUD-approved counseling agency, where you can also review neighborhood market values and what you want to leave to your children. Please make your decision after thoroughly discussing it with your family. Reconfirming the neighborhood market value is the first step. This article is not investment or legal advice, and it is recommended to consult with a professional before applying.