When consulting in Glenview, the first thing to explain to those inquiring about reverse mortgages is the requirement for HUD-approved counseling. Many of those who come in with interest are unaware that there is a counseling process involved. They often think they can apply directly to a lending institution, but they are informed that the Federal Housing Administration's HECM (Home Equity Conversion Mortgage) product requires counseling with a HUD-approved counselor before applying.

A reverse mortgage is a product that allows homeowners aged 62 and older to receive funds by using their home equity as collateral. Unlike a traditional mortgage, which requires monthly payments, funds are received from the lender in a lump sum, monthly payments, or a line of credit. The loan principal and interest are repaid when the home is sold, the owner passes away, or the home is no longer used as the primary residence.

Recent market data shows that the typical value of homes in Glenview is around $551,142 (Zillow, 2026). With this level of home value, long-term homeowners are likely to have significant equity built up, which can increase the amount of funds available through a reverse mortgage. However, Illinois has one of the highest effective property tax rates in the nation at 2.01% (Tax Foundation, 2026). It is essential to consider that while having substantial equity is beneficial, the ongoing burden of property taxes must also be taken into account.

There are multiple ways to receive funds. If a lump sum is needed, it can be taken as a one-time payment; if a certain amount is needed monthly, it can be received as monthly payments; or if funds are needed as required, a line of credit can be established, with the option to mix these methods. The appropriate method depends on future spending plans and financial status, so this should be thoroughly discussed during the counseling process. For those who have moved to Glenview after retiring from another state, it is particularly important to be aware of the property tax levels. Many are surprised by Illinois's tax rates if they only consider the rates from their previous state. Even if equity is utilized through a reverse mortgage, the tax rate itself will not decrease, so it is wise to check the property tax notices for the target area before moving.

The first aspect to consider when reviewing a reverse mortgage is the costs involved. Initial costs, including origination fees, mortgage insurance premiums (MIP, approximately 2% initially + 0.5% annually), and closing costs, tend to be higher than those of traditional mortgages (CFPB). It is easy to overlook these initial cost burdens when focusing solely on the benefits of utilizing equity.

As time passes, the loan balance increases, which reduces the homeowner's equity. This means that the assets that can be passed on to children may decrease. Additionally, if property taxes, insurance, and maintenance costs are not continuously paid, there is a risk of default, which could lead to losing the home. However, HECM is a non-recourse loan structure, meaning that if the home value falls below the loan balance later on, heirs are not required to pay the difference due to FHA insurance, which serves as a safety net.

Eligibility requirements must also be considered. Applicants must be at least 62 years old, the home must be their primary residence, and if there is an existing mortgage balance, it must be at a level that can be paid off with the reverse mortgage funds. Additionally, they must pass a financial assessment to determine if they can continue to pay property taxes and insurance.

The mandatory counseling with a HUD-approved counselor mentioned earlier is a separate process from the financial assessment, ensuring that the applicant fully understands the product structure and alternatives. Given that there are actual cases of fraud targeting seniors related to reverse mortgages, it is safer to take the counseling process slowly rather than rushing to respond to unsolicited calls or promotional offers. It is also important to note that a reverse mortgage is not the only option. Downsizing or utilizing a traditional home equity line of credit (HELOC) are also viable methods. Each has its pros and cons, so it is advisable to compare multiple alternatives rather than making a decision based solely on reverse mortgages. This article does not constitute investment or legal advice, and it is recommended to have thorough discussions with a HUD counselor and family before applying.