A retiree living in Seattle shared during a consultation that their monthly living expenses are tight with only pension and Social Security. They own a home but lack cash, a common situation. For those facing such concerns, a reverse mortgage could be one option. However, I want to emphasize that it is not a one-size-fits-all solution, as other alternatives may be more suitable depending on individual circumstances.

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 lender provides funds to the homeowner in a lump sum, monthly payments, or a line of credit. The principal and interest are settled when the home is sold, the homeowner passes away, or the home is no longer used as the primary residence. The HECM, which is insured by the FHA, is the only type guaranteed by the federal government and is the most representative.

As of March 2026, the median home price in Seattle is around $865,000 (according to Houzeo). For households that have lived there for a long time, this means they have built up significant equity. The effective property tax rate in King County, where Seattle is located, is about 0.88 percent of the property value (according to TaxRates). For those who find it difficult to manage living expenses and taxes solely on fixed income, this tax burden can also be a realistic concern. It's important to remember that while a home is an asset, it also incurs annual costs.

Here are the eligibility requirements summarized:

• Must be 62 years or older
• The home must be the primary residence
• If there is an existing mortgage, it must be at a repayable level
• Must pass a financial assessment to confirm the ability to continue paying taxes and insurance

The biggest advantage is that if you meet the requirements, you can create a cash flow to supplement living expenses without monthly repayment obligations. The non-recourse structure also means that if the home value falls below the loan balance later, heirs are not required to pay the difference, which is reassuring.

There are multiple ways to receive funds. You can choose to receive a fixed amount monthly, for a set period, or use a line of credit that allows you to withdraw as needed within a limit. Combining different methods is also possible. I recommend considering which method aligns with your living expense patterns and obtaining estimates from various lenders to carefully compare fees and terms.

However, there are also important points to be aware of. The origination fee and mortgage insurance premium (initially about 2 percent, then around 0.5 percent annually), along with closing costs, can make the initial expenses higher than a traditional mortgage. Over time, the loan balance increases while equity decreases, which may reduce the assets passed on to children. The responsibility for home maintenance remains with the owner throughout the loan period. Additionally, if property taxes and insurance cannot be paid, it could lead to default and the risk of losing the home, which must be remembered.

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). It is expected that the number of retirees worrying about living expenses on fixed income will continue to rise. Consequently, inflated solicitations targeting the elderly may also increase, so it's safer to be cautious of unfamiliar calls or visits, and you can verify if a lender is legitimate on the HUD website. To apply for a HECM, you must undergo mandatory counseling with a HUD-approved counseling agency, where you can calmly assess whether this choice truly fits your situation. Please discuss thoroughly with your family before making a decision. Take your time to verify everything without rushing. This article is not investment or legal advice, and I recommend consulting a professional before applying.