| Reverse Mortgage FAQs

Reverse Mortgage Basics

What exactly is a reverse mortgage?
A reverse mortgage is a loan for homeowners 62+ that allows you to convert part of your home equity into tax-free* funds. Unlike a traditional mortgage, you don’t make monthly payments—equity is accessed over time while you remain in your Arizona home and continue paying taxes, insurance, and maintenance.
How does a reverse mortgage work in Arizona?
You can access your equity as a lump sum, monthly payments, or a growing line of credit. Repayment is deferred until the last borrower permanently leaves the home. When the loan becomes due, the home is typically sold and the proceeds pay off the balance.
Why do Arizona seniors consider a reverse mortgage?
Many Arizona homeowners choose a reverse mortgage to eliminate monthly payments, supplement retirement income, refinance an existing mortgage, bridge healthcare expenses, or improve long-term financial stability.
What are the pros and cons of a reverse mortgage?
Pros include no monthly mortgage payments, flexible payout options, and FHA-backed protections. Cons include a growing loan balance over time and the requirement to maintain taxes, insurance, and property upkeep.
What types of reverse mortgages are available in Arizona?
• HECM (FHA-insured)
• Jumbo Reverse Mortgage – ideal for high-value homes in Scottsdale, Sedona, Paradise Valley
• HECM for Purchase – buy a home using reverse mortgage financing
What are the eligibility requirements?
You must be 62 or older, live in the home as your primary residence, have substantial equity, and meet FHA property and credit guidelines. HUD-approved counseling and no delinquent federal debt are also required.
What responsibilities do borrowers still have?
You must continue paying property taxes, homeowner’s insurance, HOA dues (if applicable), and maintain the home in good condition.
Is a reverse mortgage legitimate?
Yes. Reverse mortgages are FHA-regulated, widely used, and offer strong consumer protections. Many misconceptions come from outdated information.

Your Family

What happens if heirs inherit a home with a reverse mortgage?
Heirs may pay off the loan, refinance it, sell the home and keep remaining equity, or walk away using FHA’s non-recourse protection. They may also pay 95% of the home’s value if the balance exceeds it.
What happens when the last borrower passes away?
The loan becomes due. Heirs can sell the home, refinance, or complete a deed-in-lieu. Eligible non-borrowing spouses may remain under certain protections.
How does a reverse mortgage work during a divorce?
A reverse mortgage can help one spouse remain in the home by using available equity for a buyout while keeping monthly payments low or nonexistent.
Will my heirs receive less because of a reverse mortgage?
Possibly, depending on how much equity is used. However, a reverse mortgage can help preserve other retirement assets that might otherwise be spent.

Personal Finance

Do I still pay property taxes in Arizona?
Yes. Borrowers must pay property taxes, homeowner’s insurance, and HOA dues. Some borrowers reserve funds from loan proceeds to assist with these expenses.
What interest rate applies to reverse mortgages?
Rates vary based on product type and market conditions. Team CD of Fairway Home Mortgage can provide current rate options tailored to Arizona homeowners.
Can I sell my home if I have a reverse mortgage?
Yes. You may sell at any time because you remain the homeowner. The loan balance is simply paid off at closing.
Can I refinance my reverse mortgage?
Yes. Many borrowers refinance to access more equity, adjust interest rates, or change payment options.

Payment

What if my loan balance exceeds home value?
FHA non-recourse protection ensures you never owe more than the home’s value, even if the loan balance is higher.
Which payout option is best?
It depends on your financial goals. Many Arizona borrowers prefer the growing line of credit for long-term flexibility, but lump sum and monthly payments are available.

Long-Term Care

Can reverse mortgage funds be used for healthcare?
Yes. Funds can be used for long-term care, medical bills, in-home support, or long-term care insurance.
Will a reverse mortgage affect Medicaid?
Loan proceeds are not considered income, but once deposited they may count as assets for Medicaid. Consult an Arizona Medicaid expert for details.
What if I move into a nursing facility?
Short-term medical absences are generally allowed. If your home is no longer your primary residence long-term, the loan may eventually become due.

Ready to Explore Your Arizona Reverse Mortgage Options?

Team CD of Fairway Home Mortgage specializes in personalized guidance through the Reverse Mortgage process.

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11811 N Tatum Blvd Suite 2700, Phoenix, AZ 85028, USA

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Phoenix, Arizona 85028

Copyright © 2026 Fairway Independent Mortgage Corporation doing business as Fairway Home Mortgage. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. Fairway is not affiliated with any government agencies. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity. Arizona Mortgage Banker License No. 0904162. Dawn Buxton NMLS 308905 | Craig Gallegos NMLS 447602 Complaints may be directed to: (877) 699-0353 or Email us: [email protected]. Licensed by the Department of Business Oversight under the California Finance Lenders Law. Loans made or arranged pursuant to a California Finance Lenders Law License. Licensed Nevada Mortgage Lender NMLS #2289 Craig Steven Gallegos MLO# 447602 Dawn Marie Buxton MLO#308905. Office Phone 480-626-2202