Recently, there has been a steady increase in requests for consultations from Buffalo residents concerned about living expenses after retirement. Families feeling that their pensions are insufficient are looking for ways to utilize their home equity without selling their homes, leading them to inquire about reverse mortgages. The key items to check in this situation can be broadly categorized into three areas.

• Product Structure - Whether homeowners aged 62 and older can receive funds as a lump sum, monthly payments, or a line of credit using their equity as collateral, and whether repayment is required upon sale, death, or if the home is no longer used as a primary residence.
• Local Conditions - Whether homeowners can continue to pay property taxes and insurance based on the housing value and property tax levels in Buffalo.
• Costs and Risks - Whether they have checked the initial costs, the rate of equity reduction, and the risk of default.

The most commonly used product 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 U.S. federal government. The application requirements include being 62 years or older, the home being the primary residence, having an existing mortgage balance that can be paid off with the loan amount, and passing a financial assessment to ensure the ability to continue paying taxes and insurance (according to hud.gov).

In Buffalo, the average home value according to Zillow is $249,081, which has increased by 3.1% over the past year (as of 2026, Zillow). The effective property tax rate in Buffalo is currently around 0.31% (according to Ownwell), which is significantly lower than the New York state average of 1.90%. However, it is important to note that a lower tax rate does not mean there is no need to continue paying property taxes, which should be considered as the first item to check. Additionally, the actual loan limit can vary not only based on the home value but also on the age of the younger applicant and the interest rate at the time of application, with older applicants and lower interest rates generally allowing for a larger amount to be borrowed, leading to different outcomes for households even within Buffalo.

Looking at the second item regarding costs, the origination fees and mortgage insurance premiums (MIP, initially around 2% with an additional annual rate of 0.5%), along with closing costs, result in higher initial costs compared to traditional mortgages (according to consumerfinance.gov). The third item regarding risks includes the possibility that as time goes on, the loan balance increases while the equity left in the home decreases, potentially reducing the assets passed on to children, and that failure to continue paying property taxes, insurance, and maintenance costs could lead to default.

Of course, there are advantages as well. Homeowners can secure cash flow for living expenses without monthly repayments, and HECM has a non-recourse structure, meaning that if the home value falls below the loan balance later, heirs are not required to pay the difference thanks to FHA insurance. However, this advantage should also be evaluated after considering the three key items. Recent market trends indicate that in areas like Buffalo with lower property tax rates, consultations tend to focus more on the rate of equity reduction and the potential decrease in inherited assets. Addressing these three key items early in the consultation process can make the subsequent decision-making process much smoother, as observed in market trends.

In New York State, 18.9% of the population is aged 65 and older (as of 2024). It is expected that families in Buffalo concerned about living expenses after retirement will become more common. HECM applicants must undergo mandatory counseling with a HUD-approved counselor before applying, and it is advisable to review the three key items outlined earlier during this counseling session. Since there are actual scams related to reverse mortgages targeting the elderly, it is important not to rush and to discuss thoroughly with family before making a decision. This article does not constitute investment or legal advice, and it is recommended to consult with a professional before entering into any contracts.