A customer I met recently immediately waved their hands when I brought up reverse mortgages. They mentioned hearing from others that if you do that, you'll lose your home later. As I explained with real examples, the misunderstanding was cleared up, but this reaction is not uncommon in Jacksonville.

A reverse mortgage is a product that allows homeowners aged 62 and older to borrow against the equity of their home. Unlike a traditional mortgage, where you make monthly payments, you receive funds 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. After the owner passes away, the heirs sell the home to settle the loan; it is not a product that allows the lender to take the home while the owner is alive. The most common type is the HECM, which is insured by the Federal Housing Administration. Clearly outlining the eligibility requirements also helps reduce misunderstandings. You must be at least 62 years old, the home must be your primary residence, and you must pass a financial assessment to ensure you can continue to pay property taxes and insurance premiums.

The average home value in Jacksonville is around $295,910 as of 2026 (Zillow). For retirees who have owned their homes for a long time in this area, it is common to have significant equity. However, there are costs associated with accessing this equity. When you combine the origination fees and mortgage insurance premiums (initially around 2% and about 0.5% annually) with closing costs, the upfront costs are generally higher than a traditional mortgage. This was also evident in the actual case I reviewed. The customer was initially taken aback by these costs, but by adjusting the withdrawal method from a lump sum to a line of credit, they were able to reduce their burden by only taking out what they needed when necessary.

Another point to consider is property taxes. The effective property tax rate in Duval County, where Jacksonville is located, is around 1.24% on average (Ownwell), which is higher than the national average. There are variations in tax rates within Jacksonville depending on the area, so it's advisable to check the actual burden along with assigned schools in advance. Even after obtaining a reverse mortgage, the owner is still obligated to pay property taxes and homeowners insurance. Failing to do so can lead to a real risk of losing the home due to default. As time goes on, interest accrues on the loan balance, which can reduce the homeowner's equity, potentially leading to a decrease in the inheritance left for children or others.

On the other hand, the non-recourse structure is a notable advantage. If the home value decreases below the loan balance in the future, thanks to FHA insurance, heirs are not required to pay the difference. Florida has a high percentage of residents aged 65 and older, making up 21.75% of the population, which is among the highest in the nation (America's Health Rankings). The demand for such consultations in Jacksonville is likely to continue. Like this customer, many are initially hesitant to even consider it due to misunderstandings and vague fears, but once they understand the accurate structure and costs, they often take the time to assess whether it fits their situation.

Before applying for a HECM, you must undergo mandatory counseling from a HUD-approved counseling agency, and related scams targeting the elderly have been reported, so it's important to have thorough discussions with family and seek sufficient counseling before making a decision. Once you distinguish between misunderstandings and the actual costs you need to bear, it becomes much clearer whether it suits your situation. I want to emphasize that taking the time to review based on accurate information rather than making hasty decisions based on misunderstandings often leads to better choices. This article is not investment or legal advice, and I recommend consulting a professional before entering into any contracts.