$264,789. This is a recent figure representing the typical value of homes in the Houston area (as of 2026). What this number means is simple: the longer a homeowner has lived in their house, the more equity they have built up as their mortgage balance decreases. A recent client I met during a consultation was more concerned about how to utilize this equity than about whether the assets they would pass on to their children would diminish.

A reverse mortgage is a product that allows homeowners aged 62 and older to borrow against the equity in their home. Unlike a traditional mortgage, which requires monthly payments, reverse mortgages can provide funds in a lump sum, monthly payments, or a line of credit, with the principal and interest due when the home is sold, the owner passes away, or the home is no longer used as the primary residence. The most common product is the HECM, which is insured by the Federal Housing Administration.

The eligibility requirements are also worth noting. You must be at least 62 years old, the home must be your primary residence, if there is an existing mortgage balance, it must be at a level that can be paid off with the reverse mortgage funds, and you must pass a financial assessment to ensure you can continue to pay property taxes and insurance.

The advantage is cash flow. You can cover living expenses or medical costs without the burden of monthly repayments, and because of the non-recourse structure, even if the home value falls below the loan balance later on, heirs are not required to pay the difference thanks to FHA insurance.

Houston is known for having significant price variations between neighborhoods within its large metropolitan area. Even within the same city, the appraised value can vary greatly depending on the neighborhood, so I reminded this client that the exact amount they could borrow would need to be confirmed through an actual appraisal.

Now, let's address the inheritance issue that the client was most curious about with some numbers. Over time, the loan balance increases due to the interest and withdrawals, which means the equity in the home decreases. This implies that the assets left for children may be less than initially expected. This is a crucial point that families considering inheritance should calculate in advance.

When looking at costs, the burden becomes clear. When you add the origination fee, mortgage insurance premium, and closing costs, the initial costs are higher than those of a traditional mortgage. The mortgage insurance premium is approximately 2 percent initially, with an additional 0.5 percent each year.

Property taxes are another figure that needs to be continuously monitored. The effective property tax rate in Harris County is reported to be about 2.03 percent of the assessed value, including city, county, and school district taxes. Even after obtaining a reverse mortgage, the homeowner must continue to pay these taxes and insurance, and failure to do so could lead to default.

In Texas, the population aged 65 and older is 14 percent, which is lower than the national average of 18 percent. This means that information for retirees is relatively less accumulated in the area, so it is important to develop the habit of verifying each figure directly.

To add another number, the loan limit for a reverse mortgage varies based on the appraised value of the home and the age of the owner. The older you are and the higher the home value, the more you can borrow. However, this figure must be confirmed through the lender's assessment and appraisal, so it is realistic to gauge only a rough range during pre-consultation.

Additionally, I informed this client about scams related to reverse mortgages. There have been reports of cases where seniors are lured into signing by offers of free home renovations or investment products, so if they receive unfamiliar solicitations, they should not rush and should first check with HUD counseling agencies or family members. I also recommended simulating how much the loan balance increases each year with specific figures. Since the estimates provided by counseling agencies may vary slightly, comparing explanations from multiple sources is also a good approach.

Before applying for an HECM, you must undergo mandatory counseling with a HUD-approved counseling agency. If you have an inheritance plan, be sure to confirm the rate of equity reduction during this counseling and discuss it thoroughly with your family before making a decision. This article is not investment or legal advice, and I recommend consulting with a professional before entering into any contracts.