There is a couple in Lynnwood who have been consulting for a long time. They wanted to pass their home down to their two children. They asked if taking out a reverse mortgage would disrupt that plan. The answer is not simple. The remaining equity depends on how long and how much the loan is used. This is something that needs to be calculated in advance, especially if there is an inheritance plan.

Let's clarify what a reverse mortgage is. It is a product for homeowners aged 62 and older. It allows them to receive money using their home equity as collateral. There are no monthly repayments. The lending institution actually pays the homeowner. Options include 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 no longer lives in the home. The HECM, insured by the FHA, is the primary product. It is the only type of reverse mortgage backed by the federal government. The product structure is simple, but the decision should be made carefully.

The median home price in Lynnwood is $720,000 as of March 2026 (according to Houzeo). It has slightly increased from the previous year. The longer a home has been owned, the more equity it likely has built up. The loan limit is determined by the appraised value, age, and interest rate. The exact numbers will come after consultation and appraisal. Lynnwood is part of Snohomish County. The effective property tax rate in this county is about 0.89 percent of the asset value (according to TaxRates). Even with a reverse mortgage, this tax remains the owner's responsibility. Tax bills come every year. The same applies if a loan is taken out. Home insurance premiums must also continue to be paid.

The qualifications are clear.

• Age 62 or older
• Primary residence
• Ability to repay existing mortgage
• Pass a financial assessment

The advantages are also clear. There is no monthly repayment burden. It creates cash flow for living expenses and medical costs. With a non-recourse structure, heirs are not required to pay the difference if home values drop. These three points are definite benefits.

There are various ways to receive the funds. One can receive monthly payments. There is also a method to receive funds for a set period. Another option is to withdraw as needed from a line of credit. A combination of these methods is also possible. You can choose based on your cash flow patterns.

Conditions vary by lending institution. Fees differ as well. Interest rates also vary. You should not look at just one option. It is important to get estimates from multiple places to compare. This will help minimize losses.

Returning to the concern about leaving assets to children, the longer a loan is used, the more equity continues to decrease. The share to be divided between the two children may also decrease accordingly. The larger the loan amount and the longer it is used, the greater this gap becomes. The initial costs are not low either. There are origination fees, mortgage insurance premiums (initially about 2 percent, then 0.5 percent annually), and closing costs. Throughout the loan period, there is also a duty to maintain the home. If property taxes and insurance premiums are not paid, there is a risk of default. To accurately calculate the share to be passed on to the two children, this risk must also be factored in. If the home is lost, there is nothing to inherit. This is a heavy issue. It is advisable to discuss this with the children beforehand.

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 seems that households with similar concerns will continue to increase. As the retirement population grows, so does the demand for related consultations and households contemplating inheritance planning. Before applying for HECM, one must go through mandatory counseling with a HUD-approved counseling agency. If there is a share you want to leave to your children, it is advisable to clarify specific numbers during this counseling. If you receive a call from an unfamiliar place urging you to hurry, it is better to hang up. The formal process should not be rushed. Taking your time to confirm multiple times is not too late. Discussing this with both children in advance will reduce misunderstandings later. It is recommended to make a decision after sufficient discussion with family. This article is not investment or legal advice, and it is recommended to consult with a professional before applying.