One of the first concerns is often having a home but lacking cash. A family that consulted in Riverside faced this issue. Their income had decreased after retirement, but they had built up significant equity in their home over the years. The first question was how to utilize this equity.

There are several ways to convert home equity into cash. You can sell the house, take out a Home Equity Loan, or use a reverse mortgage. Among these, a reverse mortgage allows homeowners aged 62 and older to borrow against their home without monthly repayments, receiving funds from the lender. You can choose from a lump sum, monthly payments, or a line of credit.

There's one more thing to check. You can also choose how you receive the funds. Depending on your situation, you can select from a lump sum, monthly payments, or a line of credit, and if you opt for a line of credit, the unused amount increases over time. This means you don't need to rush to access funds that aren't immediately necessary.

According to Zillow, the average home value in Riverside in July 2026 is projected to be $650,289, a decrease of 0.1% from the previous year. Homes that have been owned for a long time often have little or no remaining mortgage balance, indicating that most of the equity can be utilized.

The HECM, insured by the Federal Housing Administration, is the only type of reverse mortgage backed by the government. It is designed as a non-recourse structure, meaning that if the home value falls below the loan balance, heirs are not required to pay the difference. The ability to create cash flow for living expenses or medical costs without monthly repayment obligations is often cited as an advantage compared to other methods.

The amount you can receive depends on the applicant's age, home value, and the interest rate at the time of application. Generally, the older you are, the higher the home value, and the lower the interest rate, the larger the limit. The exact amount can be determined during the consultation and assessment process.

There are also aspects to consider. Unlike a Home Equity Loan, a reverse mortgage typically has higher initial costs due to origination fees, an initial mortgage insurance premium of around 2%, and closing costs. Over time, the equity decreases, which may reduce the assets left for children, and if property taxes and insurance premiums are not continuously paid, there is a risk of default.

The financial assessment looks at credit history, income, and expenses together. If there have been any late payments on property taxes or insurance, a portion of the loan may be set aside for taxes and insurance. This is not to restrict your spending but to help prevent issues later on.

The average property tax rate in California is about 0.71%, but this is an average that includes long-term owners benefiting from Prop 13. Recently purchased homes or those pending reassessment may realistically see rates between 1.1% and 1.3%. It's important to remember that being able to continue paying this tax after obtaining a reverse mortgage is a key factor in loan approval.

In California, individuals aged 65 and older make up 16.5% of the population, indicating that families considering how to utilize their equity will likely continue to increase.

After the owner passes away, heirs can choose to sell the home to settle the loan, pay off the balance and keep the home, or transfer the home to the lender. However, scams related to reverse mortgages targeting the elderly have been reported, so it's advisable to verify any offers of free benefits or special conditions.

To apply for a reverse mortgage HECM, you must undergo mandatory counseling with a HUD-approved counseling agency. Take your time to determine which method of utilizing equity is right for you through consultation and discussions with family.

HUD counseling can be done in person, by phone, or online. After completing the counseling, you will receive a certificate, which is required to start the loan application process.