A couple nearing retirement in Salt Lake City shared their concerns during a consultation. They worried about whether their pension and savings would last for the next 20 or 30 years. Although they had paid off their home long ago, they lamented that their monthly cash flow was not sufficient. If you are a retiree with similar concerns, you may have heard of the term reverse mortgage.

So, what exactly is a reverse mortgage? It is a product for homeowners aged 62 and older that allows them to use the equity in their primary residence as collateral. Unlike a traditional loan, instead of making monthly payments, the borrower receives funds from the lending institution. The funds can be received as a lump sum, monthly payments, or a line of credit. This money is repaid when the home is sold, the owner passes away, or the owner no longer lives in the home. The most well-known product is the HECM, which is insured by the Federal Housing Administration and is the only type of reverse mortgage backed by the federal government.

What about home prices in Salt Lake City? According to Zillow data as of July 31, 2026, the average home value is $579,572, which has increased by 2.1% over the past year. Given that it is among the higher values in Utah, if you have lived in your home for a long time, there is a good chance you have built up significant equity. However, keep in mind that the actual amount you can borrow will depend on your age, interest rates, and remaining mortgage balance.

How much are property taxes? The average effective property tax rate in Utah is around 0.53%, which is lower than the national average. While it may require further verification for Salt Lake County, one thing remains constant: even after obtaining a reverse mortgage, the homeowner is still responsible for paying property taxes and insurance. Failing to do so can lead to a risk of default.

As of 2024, the percentage of the population aged 65 and older in Utah is 12.4%, which is lower than the national average of 18%. Although Utah is considered one of the youngest states, the population aged 65 and older has steadily increased by 17.5% since 2020.

The advantage of a reverse mortgage is that it can provide cash flow for living expenses and medical costs without the burden of monthly repayments. HECM loans are non-recourse, meaning that if the home value falls below the loan balance in the future, heirs are not required to pay the difference.

However, costs and risks must also be considered. The origination fee, initial mortgage insurance premium of about 2%, annual maintenance insurance fee of around 0.5%, and closing costs can make the initial burden heavier than a traditional mortgage. As time passes, the loan balance increases and home equity decreases, which may reduce the assets you can pass on to your children.

It is also wise to think about how to utilize the funds you receive. While reverse mortgage funds do not affect Social Security or Medicare benefits, if you are receiving benefits based on income and assets, such as Medicaid or SSI, the way you hold the funds may impact your eligibility, so it is advisable to check in advance.

If a couple is living together, it is good to be aware of the spouse protection regulations. Even if only one spouse is registered as the borrower, HUD regulations are in place to protect the remaining spouse, allowing them to continue living in the home after the borrower passes away, provided certain conditions are met.

To apply for a HECM, you must pass a financial assessment and, most importantly, undergo mandatory counseling with a HUD-approved counseling agency. There have been actual cases of fraud targeting the elderly related to reverse mortgages, so it is important to receive adequate counseling and discuss it with family before making a decision. This article is not investment or legal advice, and it is recommended to consult with a professional before applying.