The median price is around $330,373. This figure represents the average home value in Columbia as reported by Zillow as of June 2026, and it has increased by 2.7 percent over the past year. Recently, while consulting with a family approaching retirement, I first showed them this number. For this family, who were concerned about how to cover living and medical expenses after retirement, this number meant that the equity built up in their home was not just a market value but a tangible asset they could actually utilize.

A reverse mortgage is a product that allows homeowners aged 62 and older to borrow against this equity from lending institutions. Unlike a traditional mortgage, which requires monthly payments, reverse mortgages provide funds in a lump sum, monthly payments, or a line of credit, and the loan is repaid when the home is sold, the owner passes away, or the home is no longer used as the primary residence. The ability to create cash flow without the burden of monthly repayments is what makes it appealing to families considering their living expenses in retirement.

However, there was one more number I pointed out during our discussion: property taxes. According to Ownwell data, the median effective property tax rate in the county where Columbia is located is 1.27 percent, which is higher than the national median of 1.02 percent. Within Columbia, the 65202 district has an annual tax of $1,782, while the 65203 district has $2,542, varying by school district and area. Receiving a reverse mortgage does not eliminate the obligation to pay property taxes, so a financial capability assessment must be passed to ensure they can continue to pay in the future for the loan to be approved.

Costs are another important number to consider. The HECM, which is backed by the Federal Housing Administration, has higher initial costs compared to traditional mortgages due to origination fees, mortgage insurance premiums (initially around 2 percent and about 0.5 percent annually), and closing costs. However, it is structured as a non-recourse loan, meaning that if the home value falls below the loan balance later, heirs are not required to pay the difference thanks to FHA insurance.

Three factors determine the amount that can be borrowed: age, interest rate, and home value. The older the borrower, the lower the interest rate, and the higher the home value, the greater the limit. HECM is only available up to the maximum amount set by HUD, and if there is an existing mortgage balance, that must be paid off first with the reverse mortgage funds.

Another number to consider is the alternative costs. A traditional home equity line has lower initial costs but requires monthly repayments, while downsizing can provide a lump sum but comes with moving costs and the burden of adapting to a new environment. For this family, the ability to increase monthly cash flow while staying in their current home was a key reason they were interested in reverse mortgages.

I also provided information on other ways to reduce property tax burdens. Missouri has a Circuit Breaker Property Tax Credit program that refunds a portion of property taxes for homeowners aged 65 and older with incomes below a certain level. The income criteria and refund limits can change annually, so it's advisable to check directly with the county treasurer's office or a tax professional.

Nonetheless, there is one number I want to emphasize: the equity left in the home decreases over time. As the monthly cash flow increases, the assets that can be left to children may decrease, and if property taxes or insurance premiums cannot be continuously paid, there is a risk of default. As of 2024, Missouri's population aged 65 and older is 18.8 percent, similar to the national average of 18 percent, indicating that many retirement households are facing similar concerns.

Finally, I informed this family about the mandatory counseling from a HUD-approved counseling agency before applying for HECM. Since scams targeting seniors regarding reverse mortgages do exist, I hope they will make a decision after thorough counseling and discussions with family. This article is not investment or legal advice, and I recommend consulting with a professional before making any actual contracts.