Understanding Reverse Mortgages in Arizona
Unlock the equity in your home — stay in the place you love.
What Is a Reverse Mortgage?
A reverse mortgage is a special type of home loan designed for homeowners 62 and older that allows you to convert a portion of your home’s equity into tax-free cash — without having to sell, move, or make monthly mortgage payments.
Unlike traditional home loans, reverse mortgages work in reverse: instead of making payments to a lender, the lender makes payments to you. You can receive your funds as a lump sum, monthly payments, or a line of credit — depending on what fits your financial goals.
Top Reasons Arizonans Consider a Reverse Mortgage:
- Stay in your home and age in place
- Eliminate monthly mortgage payments
- Supplement Social Security or retirement income
- Pay for home renovations or long-term care
- Protect investment accounts during market downturns
Purpose of a Reverse Mortgage in Arizona
The primary purpose of a reverse mortgage is to allow Arizona homeowners aged 62 and older to tap into the equity in their home and convert it into tax-free cash — all while continuing to live in and own their home.
Reverse mortgages are designed to:
- Help seniors age in place comfortably
- Eliminate monthly mortgage payments
- Provide flexible access to funds during retirement
- Offer an alternative to selling, downsizing, or relying solely on Social Security or savings
In retirement, especially in high-home-equity areas like Lake Havasu City, Prescott, or Mesa, a reverse mortgage allows seniors to use the value of their home to support their lifestyle, healthcare, or legacy goals — without giving up ownership or moving away from the place they love.
Top Benefits of a Reverse Mortgage in Arizona
Here are the key benefits that make reverse mortgages appealing to Arizona homeowners:
Stay in Your Home Long-Term
With a reverse mortgage, you don’t have to sell or move. You get to stay in your home — surrounded by familiar neighbors, friends, and local amenities — while still benefiting from your home’s equity.
Benefit: Ideal for aging in place in Arizona communities with strong retirement appeal.
Eliminate Monthly Mortgage Payments
Once your reverse mortgage is in place, you no longer make monthly mortgage payments. That monthly expense is gone, instantly improving your cash flow.
Benefit: Free up thousands of dollars annually in a fixed-income retirement budget.
Access Tax-Free Cash When You Need It
Receive your funds as:
- A lump sum
- Monthly payments
- A line of credit
- Or a combination of the above
Benefit: Use the money for medical bills, home upgrades, in-home care, travel, or unexpected expenses — all without tax consequences.
No Income or Credit Requirements
Unlike traditional loans, a reverse mortgage is not based on your income or credit score. It’s based on your age, the value of your home, and your equity.
Benefit: Even if you’re retired, on Social Security, or have limited income, you can still qualify.
Protect Your Heirs and Estate
A reverse mortgage is a non-recourse loan — meaning you or your heirs will never owe more than the home’s value when the loan is repaid. Any remaining equity goes to your estate.
Benefit: Peace of mind for your family, and the ability to leave a legacy if desired.
Tailored for Arizona Homeowners
Arizona’s high rate of homeownership, strong senior population, and low property taxes make it one of the best states for utilizing reverse mortgages.
Benefit: Seniors in areas like Lake Havasu, Phoenix, and Flagstaff often have significant untapped equity and can enjoy more freedom and flexibility.
Reverse Mortgage vs. Forward Mortgage
Understanding the Key Differences for Arizona Homeowners
| Feature | Reverse Mortgage | Forward (Traditional) Mortgage |
| Purpose | Converts home equity into cash for the homeowner | Helps purchase or refinance a home by borrowing money |
| Who Pays Who | Lender pays you (in lump sum, monthly payments, or line of credit) | You make monthly payments to the lender |
| Age Requirement | Must be 62 or older (for HECM reverse mortgage) | No age requirement |
| Income & Credit Requirements | Minimal — based on home equity and age | Requires income, credit score, and debt-to-income ratios |
| Home Equity Requirement | Must own home outright or have significant equity | Can buy with little to no equity, depending on down payment |
| Monthly Mortgage Payments | No monthly mortgage payments required | Monthly mortgage payments are required |
| Loan Repayment | Repaid when the last borrower dies, moves out, or sells | Repaid over time through monthly payments |
| Interest Accrual | Interest accrues and is added to the loan balance | Interest is paid down with each monthly payment |
| Ownership | Homeowner retains full ownership | Homeowner retains ownership |
| Non-Recourse Protection | Yes — you’ll never owe more than the home’s value | Not typically applicable unless specified in loan terms |
| Use of Funds | Can be used for anything: medical bills, home repairs, travel, in-home care, etc. | Funds are generally used to purchase or refinance a home |
Types of Reverse Mortgages
Home Equity Conversion Mortgage (HECM)
The HECM is the standard reverse mortgage used by most seniors in the U.S., including Arizona. It’s insured by the Federal Housing Administration (FHA), which offers important borrower protections, including non-recourse terms (you’ll never owe more than your home is worth).
Key Features:
- Available to homeowners 62 and older
- Must be your primary residence
- HUD counseling is required
- Flexible payment options: lump sum, monthly payments, line of credit, or combo
- Loan limit set by the FHA (currently around $1,149,825 in 2025)
- Must continue paying property taxes, homeowners insurance, and maintain the home
Best For:
- Homeowners with significant equity
- Seniors looking for flexibility and federally backed protection
- Those wanting to stay in their home long-term
Popular in Arizona due to high home values and aging-in-place trends
Proprietary Reverse Mortgage
A proprietary reverse mortgage is a private loan offered by lenders, not insured by the government. These are often called jumbo reverse mortgages and are designed for high-value homes — typically those appraised over the FHA HECM limit.
Key Features:
- Available to homeowners 62+ (some lenders offer at 55+)
- Higher loan amounts available (great for luxury or high-value properties)
- May offer lower upfront costs
- Not subject to FHA loan limits or insurance premiums
Best For:
- Seniors with homes worth more than $1.2 million
- Those who want to access more cash than a HECM allows
- Homeowners looking for more customized lending terms
Common in upscale Arizona areas like Scottsdale, Sedona, and Fountain Hills
Arizona Reverse Mortgage Loans: The Application Process
Here’s a step‑by‑step guide to the reverse mortgage application process—perfect for Arizona homeowners considering a Home Equity Conversion Mortgage (HECM) or other reverse mortgage options.
Check Your Eligibility
Before you start the formal application, make sure you meet the basic requirements:
- Age 62 or older (55+ for some proprietary products)
- Own your home outright or have a low existing mortgage balance
- Live in the home as your primary residence
- Be current on property taxes, homeowners insurance, and maintenance
Attend HUD‑Approved Counseling
Why it matters: Federal law requires all HECM applicants to complete one‑on‑one counseling with a HUD‑approved agency.
What you’ll learn:
- How a reverse mortgage works
- Alternatives (selling, downsizing, home equity loans)
- Loan costs and payment options
- Impact on heirs and estate planning
Gather Your Documentation
Having your paperwork ready will speed up underwriting:
- Proof of Age: Driver’s license, passport, or birth certificate
- Proof of Ownership: Deed or mortgage statement
- Proof of Income/Assets: Social Security award letter, bank statements (for proprietary lenders this matters less)
- Homeowners Insurance Declaration Page
- Latest Property Tax Bill
- Home Maintenance Records (if available)
Submit Your Application
Working with a qualified reverse mortgage lender (like Mohave Mortgage) your loan officer will:
- Complete the loan application—either online or on paper.
- Order an appraisal from a HUD‑approved appraiser to determine your home’s “eligible” value.
- Verify your financial assessment (for HECMs, the lender reviews your ability to meet obligations).
Home Appraisal & Underwriting
- The appraiser inspects your home and delivers a report on condition and market value.
- The lender’s underwriting team reviews all documents, appraisal, and counseling certificate.
- Conditional loan approval is issued once underwriting is satisfied.
Loan Closing & Disbursement
Once approved, you’ll:
- Sign closing documents at a title company or attorney’s office.
- Pay closing costs (can be financed into the loan).
- Choose your disbursement plan:
- Lump sum
- Tenure (fixed monthly payments)
- Term (monthly for a set period)
- Line of credit
- Or a combination
After closing, funds are released per your chosen plan.
Post‑Closing Responsibilities
To keep your loan in good standing, you must:
- Continue paying property taxes
- Maintain homeowners insurance
- Keep the home in livable condition
- Occupy the home as your primary residence
If you ever move out permanently or pass away, the loan becomes due—your heirs can sell, refinance, or repay in cash.
Typical Timeline
- Counseling to Application: 1–2 weeks
- Application to Appraisal: 1–3 weeks
- Underwriting & Approval: 2–4 weeks
- Closing & Funding: 1–2 weeks
Total: 6–10 weeks from start to finish.
How to Qualify for a Reverse Mortgage
What Arizona Seniors Need to Know
To be eligible for a reverse mortgage — specifically a Home Equity Conversion Mortgage (HECM) backed by the FHA — homeowners must meet the following:
Age Requirement
You must be 62 years or older (for HECM). Some proprietary reverse mortgages may be available to those as young as 55, depending on the lender.
Only one borrower needs to meet the age requirement, but both spouses should be listed to protect non-borrowing spouses.
Primary Residence Only
The home must be your primary residence — where you live the majority of the year.
Eligible property types include:
- Single-family homes
- FHA-approved condos
- Townhomes
- 2–4 unit properties (as long as the borrower lives in one unit)
- Manufactured homes (must meet HUD standards)
*Investment properties and vacation homes do not qualify.*
Home Equity Requirements
You must either:
- Own your home outright, or
- Have a low mortgage balance that can be paid off at closing using the reverse mortgage proceeds
The more equity you have, the more funds you can access. Most lenders want to see at least 50%–60% equity, depending on your age and interest rates.
Financial Assessment
While reverse mortgages don’t require traditional income or credit qualifications, lenders do conduct a financial assessment to ensure you can:
- Pay property taxes
- Maintain homeowners insurance
- Cover basic maintenance and HOA dues (if applicable)
You don’t need perfect credit or high income, but the lender will verify that you’re able to meet these obligations, sometimes by setting aside a portion of your funds (called a Life Expectancy Set-Aside, or LESA).
HUD-Approved Counseling Session
Before applying, all borrowers must complete a reverse mortgage counseling session with a HUD-approved counselor. This is a federal requirement for HECM loans and helps ensure you understand:
- Loan terms and costs
- Alternatives to a reverse mortgage
- Impact on heirs and estate
You’ll receive a certificate that must be submitted with your application.
Arizona Reverse Mortgage Tip:
In high-equity areas like Lake Havasu, Bullhead City, and Prescott, many retirees qualify for a reverse mortgage simply due to long-term home appreciation — even if they are on a fixed income.
Summary: Do You Qualify?
| Requirement | Qualification |
| Age | 62+ (or 55+ for some proprietary loans) |
| Residency | Must live in the home as your primary residence |
| Equity | Must own home outright or have substantial equity |
| Home Type | Single-family, FHA-approved condos, manufactured homes (HUD compliant) |
| Financial Assessment | Must show ability to pay taxes, insurance, and upkeep |
| Counseling | Completion of HUD-approved reverse mortgage counseling |
Choosing the Right Reverse Mortgage Lender
Why Working with a Certified Reverse Mortgage Specialist (CREV™) Matters in Arizona
When it comes to unlocking the equity in your home through a reverse mortgage, the most important decision you’ll make is choosing the right lender — and more importantly, the right loan professional. Not all lenders are created equal, and not all loan officers have the specialized training seniors deserve.
That’s why working with a Certified Reverse Mortgage Specialist who holds the CREV™ (Certified Reverse Equity Professional) designation offers peace of mind, clarity, and confidence throughout the process.
What Is a CREV™?
The Certified Reverse Equity Professional™ (CREV™) designation is awarded to mortgage professionals who have demonstrated:
- Extensive knowledge in reverse mortgage lending
- A deep understanding of the needs of senior homeowners
- A commitment to ethical practices, continuing education, and transparency
- The ability to guide clients through HECM, proprietary, and refinance options with confidence
CREV™ professionals are trained to help borrowers understand not just the loan — but the impact on their estate, family, taxes, and retirement strategy.
Why Work with a CREV™ Professional?
Here’s what sets a CREV™-certified lender apart from the rest:
| Feature | Regular Lender | CREV™ Certified Specialist |
| Reverse Mortgage Training | Basic or general | Advanced, reverse-specific |
| Understanding of Arizona Market | Varies | Specialized in senior housing and equity in AZ |
| Client Education | Sales-driven | Counseling-focused, holistic |
| Family & Heir Guidance | Rare | Included and encouraged |
| Fiduciary-Like Approach | Not guaranteed | Standard practice with CREV™ ethics |
Local Expertise for Arizona Seniors
Working with a local Arizona reverse mortgage specialist who holds the CREV™ means you benefit from someone who:
- Knows property values and senior housing trends in Lake Havasu, Prescott, Bullhead City, and beyond
- Understands Arizona-specific factors like senior tax exemptions, HOA rules, and manufactured home eligibility
- Can explain how reverse mortgages affect your Medicaid, Medicare, and long-term care planning
5 Common Myths About Reverse Mortgages
Myth #1: “I’ll lose ownership of my home.”
Truth: You keep your home with a reverse mortgage — the lender does not take the title.
One of the biggest reverse mortgage myths is that seniors will lose their home to the bank. But in fact, reverse mortgage homeowner rights are protected under the Home Equity Conversion Mortgage (HECM) program. Seniors continue to own their home as long as it remains their primary residence, and they meet basic responsibilities such as paying property taxes, homeowners insurance, and maintaining the home.
Myth #2: “I’ll owe more than my home is worth.”
Truth: With a reverse mortgage, you will never owe more than your home’s value — thanks to non-recourse protection.
Many seniors are concerned about debt piling up. But here’s the good news: reverse mortgages are non-recourse loans, meaning the FHA insurance ensures that neither you nor your heirs will owe more than the appraised value of the home at the time of sale. This protects your estate and your family’s future — even if the real estate market changes.
Myth #3: “My heirs won’t be able to inherit my home.”
Truth: Your children can inherit your home, just like with any mortgage — they simply have to repay the loan balance.
This is one of the most misunderstood aspects of reverse mortgages. Yes, your heirs can keep the home after a reverse mortgage by repaying the loan, either with cash, a refinance, or by selling the home. If the sale price is greater than the loan amount, your heirs keep the remaining equity. And if the home is worth less, they are not personally responsible for the shortfall — again, thanks to FHA non-recourse rules.
Myth #4: “Reverse mortgages are only for broke or desperate seniors.”
Truth: Financially secure seniors use reverse mortgages as a strategic tool in retirement planning.
Far from being a last resort, reverse mortgages are increasingly being used by retirees who want to:
- Delay Social Security and increase monthly benefits
- Cover unexpected medical expenses or home modifications
- Avoid withdrawing from retirement accounts during a down market
- Increase monthly cash flow by eliminating mortgage payments
With smart planning, reverse mortgages are a flexible asset for homeowners who want to age in place and maximize their retirement strategy.
Myth #5: “I can’t get a reverse mortgage if I still have a mortgage.”
Truth: You can qualify for a reverse mortgage with an existing mortgage — the new loan pays off the old one.
Many eligible seniors in Lake Havasu and beyond still have a remaining mortgage balance. That doesn’t disqualify them. In fact, the first use of the reverse mortgage proceeds is to pay off the current home loan, immediately removing the burden of monthly mortgage payments. This is one of the smartest ways to improve cash flow during retirement without moving or downsizing.
At Mohave Mortgage, our reverse mortgage team includes a CREV™ designated advisor who is trained to serve with heart, clarity, and a retirement-focused approach — not just a sales pitch.
Whether you’re considering a HECM loan, reverse for purchase, or simply exploring your options, our team is here to guide you with integrity.
Schedule your no-pressure consultation today:
Serving Lake Havasu City, Mohave County, and all of Arizona
www.mohavemortgage.com/reverse
(928) 288-2691
Terms and Conditions apply. Not all borrowers will qualify.
Mohave Mortgage NMLS#1830581
AZ-MB-1001852 CFL 60DBO-150071
Article is for informational purposes only. Contents not reviewed or approved by HUD/FHA www.nmlsconsumeraccess.org