Reverse Mortgage Glossary
A
Accrued Interest
Interest that is added to your reverse mortgage balance each month since you’re not making monthly payments.
Appraisal
A professional evaluation of your home’s market value. Required for all reverse mortgages.
Amortization Schedule
A table showing how your loan balance changes over time. (I provide this with every proposal.)
B
Borrower
The homeowner(s) who are listed on the reverse mortgage. Must be at least 62 for FHA HECM loans (55+ for some jumbo programs).
Borrower Obligations
Basic responsibilities including living in the home, paying taxes, maintaining insurance, and keeping the property in good condition.
C
Counseling (HUD Counseling)
A federally required phone or Zoom session with a HUD-approved counselor who explains the program. Protects you and ensures full understanding.
Closing Costs
Standard mortgage fees such as appraisal, title, escrow, and FHA mortgage insurance.
Credit Line / Line of Credit
Funds you can access anytime. The unused portion grows automatically, making it one of the most powerful features of a reverse mortgage.
D
Deferral Period (for Non-Borrowing Spouses)
A protection that allows a non-borrowing spouse to stay in the home after the borrower passes away, as long as certain conditions are met.
Disbursement Options
How you receive your funds — line of credit, monthly payments, lump sum, or a combination.
E
Equity
The difference between your home’s value and your mortgage balance.
Eligible Non-Borrowing Spouse (NBS)
A spouse under age 62 who is not a borrower but receives certain protections.
F
FHA (Federal Housing Administration)
The government agency that insures HECM reverse mortgages, providing protections like non-recourse rules.
Fixed-Rate Reverse Mortgage
A reverse mortgage with a set interest rate. Usually requires taking a lump sum at closing and does not offer a line of credit.
G
Growing Line of Credit
A unique feature where your unused credit increases automatically over time. Only available on adjustable-rate HECM reverse mortgages.
Ginnie Mae
A government-backed organization that securitizes many reverse mortgage loans. Included here for completeness — not something borrowers deal with directly.
H
HECM (Home Equity Conversion Mortgage)
The official name for the FHA-insured reverse mortgage program used by most borrowers.
Homeowner’s Insurance
A required policy to protect your home. Must remain active throughout the loan.
HUD (Department of Housing and Urban Development)
The agency that sets rules and standards for HECM reverse mortgages.
I
Initial Principal Limit
The maximum amount of money available to you at the time of loan closing, based on age, interest rate, and home value.
Interest Rate (Adjustable or Fixed)
Determines how your loan balance grows over time. Adjustable loans offer flexibility and line-of-credit growth.
J
Jumbo Reverse Mortgage (Proprietary Reverse Mortgage)
A non-FHA reverse mortgage designed for higher-value homes, often used in Long Beach coastal communities.
L
Loan Balance
The total amount owed at any time — grows over time since no monthly payments are required.
Loan Servicer
The company that manages your loan after closing: statements, occupancy forms, line of credit, etc.
Lump Sum
A one-time payment option where part of your available funds is given at closing.
M
MIP (Mortgage Insurance Premium)
FHA insurance that protects borrowers and heirs. Includes upfront and annual premiums.
Monthly Tenure Payments
Guaranteed monthly income for as long as you live in the home.
N
Non-Recourse Loan
A legal protection ensuring you (and your heirs) never owe more than the home is worth. Only the home repays the loan — nothing else.
O
Occupancy Certification
An annual form where you confirm that the home is your primary residence.
P
Principal Limit
The total amount of money available from your reverse mortgage.
Property Charge Assessment
A simple review to ensure you can pay property taxes, insurance, and HOA dues.
R
Refinance (HECM-to-HECM)
Replacing an existing reverse mortgage with a new one to access more equity or get better terms.
Repair Set-Aside / Holdback
Funds reserved to complete required repairs after closing.
S
Servicing Fee
Sometimes included on jumbo reverse mortgages; covers servicing and account management.
Set-Aside
Money set aside from loan proceeds to pay future expenses (like property taxes) or repairs.
T
Tenure Payments
Monthly payments guaranteed for life while living in the home.
Term Payments
Monthly payments for a set number of years.
U
Upfront MIP
Mortgage insurance premium paid at closing (generally financed into the loan).
W
Working with a Trusted Local Broker
A highly recommended best practice — and exactly what Long Beach Reverse Mortgage provides through personalized guidance, local expertise, and ongoing support.