Reverse Mortgage Questions Answered – ME and NH Homeowners

Thinking About a Reverse Mortgage in Maine or New Hampshire? Start Here.

Reverse mortgages can feel confusing - but they don't have to be. At Acadia Lending Group, we help homeowners age 62+ understand how this unique type of loan works, what it can do, and whether it's the right fit for their financial goals. Let’s determine if a reverse mortgage is a good fit for you!

If you’re a homeowner in Maine or New Hampshire, here are the most frequently asked questions about reverse mortgages.

1. What Is a Reverse Mortgage and How Does It Work?

A reverse mortgage allows homeowners aged 62 and older to convert part of their home equity into tax-free cash. Unlike a traditional mortgage where you pay the bank each month, a reverse mortgage works in the opposite direction: the equity in your home pays you. The loan balance is typically repaid when you move out, sell the home, or pass away.

For many Maine and New Hampshire homeowners, the key relationship to understand is how a reverse mortgage differs from other retirement options. For example:

• Instead of selling and downsizing, a reverse mortgage lets you stay in your home while still unlocking equity.
• Compared to a traditional refinance, you don’t make monthly mortgage payments – making it easier to manage retirement on a fixed income.
• Because the funds are tax-free, it can provide more flexibility than drawing from retirement accounts.

💡 Most reverse mortgages are Home Equity Conversion Mortgages (HECMs), which are insured by the Federal Housing Administration (FHA).

2. What Are Common Uses For A Reverse Mortgage?

A reverse mortgage isn't just about tapping equity - it's about how the loan fits into your retirement strategy. Many of our clients use them when weighing the choice between selling their home, downsizing, or finding ways to age in place. The right path depends on your goals, but here's how a reverse mortgage often comes into play:

• Refinance a traditional mortgage and reduce monthly obligations, especially in areas where property taxes are rising
• Pay for in-home-care or long-term care, offering an alternative to moving into assisted living
• Fund retirement lifestyle upgrades – like updating an older coastal home or finally enjoying that “bucket list” trip
• Establish a financial cushion for unexpected expenses, rather than relying solely on savings or retirement accounts

3. Who Qualifies for a Reverse Mortgage in Maine or New Hampshire?

You may qualify for a reverse mortgage if you:

• Are 62 years of age or older
• Own your home and have significant equity
• Use the home as your primary residence
• Can maintain the home and stay current on property taxes and homeowners insurance
• Complete a HUD-approved counseling session

Why these requirements matter:

• The age requirement ensures the program is used as a retirement tool, not short-term financing.
• Equity is key – the more you own, the more flexibility you’ll have in accessing funds.
• Because the home must be your primary residence, a reverse mortgage is designed to help you age in place rather than finance vacation or investment properties.
• Staying current on taxes and insurance protects your eligibility and safeguards the loan.
• Counseling ensures you fully understand the loan and can compare it to alternatives like downsizing, refinancing, or using savings.

For Maine and New Hampshire homeowners, this often means deciding between selling a long-time family home vs. staying put and using equity to fund retirement needs. At Acadia Lending Group, we walk clients through these qualifications and what they mean for their specific situation.

4. What Are the Pros and Cons of a Reverse Mortgage?

Like any financial tool, a reverse mortgage has both advantages and potential drawbacks. Understanding both sides helps you decide if it fits your retirement goals.

PROs:

• Stay in your home: Access your home’s equity without selling or downsizing.
• No monthly mortgage payments: As long as you live in the home and meet the requirements (taxes, insurance, upkeep), you won’t have the make monthly payments.
• Tax-free funds: The money you receive isn’t considered taxable income.
• Flexible use: Funds can cover healthcare, supplement retirement income, or create a rainy-day reserve.
• FHA insurance protection: With HECMs, you’ll never own more than your home’s value, even if the loan balance growns.

CONs:

• Reduced equity: Because you’re borrowing against your home, your heirs may inherit less.
• Loan costs: Reverse mortgages include fees, interest, and insurance premiums that can add up.
• Ongoing obligations: You must pay property taxes, homeowners insurance, and maintain the property.
• Impact on benefits: Funds could affect eligibility for need-based programs like Medicaid.
• Not for second homes: The loan only applies to your primary residence.

For Maine and New Hampshire homeowners, the key relationship is usually: Is it better to use a reverse mortgage, downsize, or refinance? At Acadia Lending Group, we help you weigh these options so you can feel confident about your decision.

5. How Much Equity Do I Need?

You'll typically need at least 50% equity in your home to qualify for a reverse mortgage, though the exact percentage varies. The total loan amount is based on several factors, including:

• Your age – The older you are, the more equity you can usually access.
• Your home's appraised value – Higher-value homes may allow for larger loan proceeds.
• Current interest rates – Rates directly impact how much equity can be converted into available funds.

Why This Matters:

• If you own your home free and clear, you’ll often have the most flexibility with how you use the funds.
• If you still have a traditional mortgage, part of the reverse mortgage proceeds will first go toward paying that off – freeing you from monthly payments.
• For Maine and New Hampshire homeowners, property values vary widely (think Portland condo vs. lakefront homes in the Lakes Region), which directly affects how much equity you can access.

At Acadia Lending Group, our reverse mortgage specialists don't just "run the numbers." We help you understand how your equity compares to other retirement funding options - like refinancing, downsizing, or drawing from savings - so you can decide what fits your long-term goals best.

6. What Are the Costs and Fees?

Common reverse mortgage fees include:

• Origination fees
• FHA mortgage insurance premiums (for HECMs)
• Title fees and closing costs

✅ Good news: Most fees can be rolled into the loan balance - so there's usually little or no out-of-pocket cost upfront.

How does this compare to other mortgages?

• Reverse mortgage closing costs are often similar to those of a traditional refinance or home equity loan, but the FHA insurance premium is unique to HECMs.
• While insurance adds cost, it also protects you: you’ll never own more than your home’s value, even if the loan balance grows.
• In ME and NH, where home values range widely (from modest inland properties to high-value coastal or lakefront homes), the insurance protection offers peace of mind to many homeowners considering a reverse mortgage.

7. How Do I Receive My Funds?

Reverse mortgage funds can be disbursed in several ways:

• A lump sum
• Monthly payments (like a paycheck)
• A line of credit you can draw from as needed
• A custom combination of the above

WHICH OPTION IS BEST?

• A lump sum may make sense if you want to pay off an existing mortgage or handle a large one-time expense.
• Monthly payments can supplement retirement income, helping with everyday expenses or healthcare costs.
• A line of credit offers flexibility – any unused portion can grow over time, making it a popular choice for homeowners who want a financial safety net.

For many Maine and New Hampshire retirees, the decision comes down to lifestyle and goals. For example, some choose monthly payments to comfortably cover rising property taxes in Southern Maine, while others prefer a line of credit to fund seasonal home repairs on a lakeside or coastal property.

At Acadia Lending Group, we'll help you compare these options and design a disbursement strategy that supports your retirement vision - whether that's staying comfortably at home, traveling more, or simply creating peace of mind.

8. When and How Do I Repay a Reverse Mortgage?

One of the biggest questions about reverse mortgages is repayment. Unlike a traditional mortgage, you don't make monthly principal and interest payments as long as you live in the home and meet the program requirements (maintaining the property, paying taxes and insurance).

Repayment is typically triggered when you:

• Move out of the home permanently
• Sell the property
• Pass away

At that point, the loan balance – including interest and fees – is repaid, usually from the proceeds of the home sale.

WHY THIS MATTERS:

• If you or your heirs decide to sell the home, any remaining equity after repaying the loan belongs to you/your estate.
• If your heirs want to keep the property, they can pay off the reverse mortgage balance and retain ownership.
• FHA-insured reverse mortgages (HECMs) come with “non-recourse” protection, which means you or your estate will never own more than the home’s value, even if the loan balance is higher.

For many Maine and New Hampshire families, this repayment structure is an important consideration when comparing retirement strategies. A reverse mortgage can allow you to stay in your home comfortably during retirement, while still leaving options for your heirs.

At Acadia Lending Group, we help you and your family understand exactly how repayment works so there are no surprises down the road.

9. What Types of Reverse Mortgages Are Available?

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which is federally insured by the FHA and available to most homeowners in Maine and New Hampshire.

However, there are other options depending on your situation:

• Proprietary reverse mortgages - Offered by private lenders, these are designed for higher-value homes that may exceed FHA lending limits.
• Single-purpose reverse mortgages - Sometimes offered by local nonprofits or government agencies, these are limited loans that must be used for a specific purpose, like home repairs or property taxes. Availability is very limited in Maine and New Hampshire.

WHY THIS MATTERS:

• For the majority of homeowners, an FHA-insured HECM is the standard and most flexible choice.
• Proprietary products may be relevant if you own a high-value property, for example, a luxury coastal home in Ogunquit or Yarmouth.
• Single-purpose programs are rare locally, so most borrowers won’t encounter them.

Our team will explain all the options available in Maine and New Hampshire so you can make an informed decision.

10. What If I Move Out or Need Assisted Living?

If you leave the home for 12 consecutive months (for example, to move into assisted living or long-term care facility), the reverse mortgage becomes due. In most cases, this means the loan will be repaid from proceeds of selling the home.

However, if your spouse is listed as a co-borrower, they may remain in the home – even if you move out. As long as they continue to meet the program requirements (property taxes, insurance, and maintenance), they won't be forced to sell.

WHY THIS MATTERS:

• Many Maine and New Hampshire homeowners use reverse mortgages specifically to help fund in-home care, allowing them to stay put longer before considering assisted living.
• Knowing the rules about moving out helps families plan ahead – whether that means leaving a home to heirs or selling when care needs change.
• For couples, it’s especially important to ensure both spouses are listed as co-borrowers to maximize protections.

At Acadia Lending Group, we guide families through these "what if" scenarios so you can plan with confidence - balancing the desire to age in place with the reality of future care needs.

11. Will a Reverse Mortgage Affect Social Security or Medicare?

No. Because reverse mortgage funds are loan proceeds, they do not count as income and do not affect:

• Social Security benefits
• Medicare eligibility

⚠️ However, there is an important distinction: if you retain large amounts of reverse mortgage proceeds (for example, in a checking or savings account), they could affect eligibility for need-based programs like Medicaid or Supplemental Security Income (SSI).

WHY THIS MATTERS:

• For most Maine and New Hampshire retirees, a reverse mortgage won’t change their core retirement benefits.
• The impact is more relevant if you’re relying on income-based programs for healthcare or long-term care support.
• This makes it important to think about how you choose to receive the funds (lump sum vs. monthly payments vs. line of credit).

12. Can I Still Leave My Home to My Heirs?

Yes. With a reverse mortgage, you still retain ownership of your home and can leave it to your heirs. When the loan becomes due, your heirs have two main options:

• Repay the loan and keep the home: They can pay off the reverse mortgage balance (often by refinancing into a traditional mortgage) and continue owning the property.
• Sell the home and keep any remaining equity: If they choose to sell, any funds left after replaying the long belong to your heirs.

💡 HECMs are non-recourse loans. That means your heirs will never owe more than the home's market value - even if the loan balance is higher.

WHY THIS MATTERS:

• Many Maine and New Hampshire homeowners want to preserve family properties, whether it’s a lakeside camp in the Belgrade Lakes or a coastal cottage in York. A reverse mortgage doesn’t prevent you from passing those homes down – it simply requires that your heirs decide whether to keep or sell.
• Because repayment typically comes from the home sale, heirs are protected from being burdened with unexpected debt.
• Having this clarity upfront helps families plan together for the future.

At Acadia Lending Group, we often encourage clients to involve their children in the reverse mortgage conversation, so everyone understands the options and feels confident about the long-term plan.

13. Are There Alternatives to Reverse Mortgages?

Absolutely. A reverse mortgage is just one way to access your home's equity - and it may not be the right fit for everyone. Depending on your goals, we can help you explore:

• Cash-out refinancing – Refinance your current mortgage and receive cash from your equity. Unlike a reverse mortgage, you’ll make monthly payments. This option can make sense if today’s interest rates are favorable and you want to preserve more equity for your heirs.
• HELOCs (Home Equity Lines of Credit) – A revolving line of credit that lets you borrow only what you need, when you need it. This can work well for homeowners with strong income who want flexibility without tapping all their equity at once.
• Downsizing to a more manageable home – Selling your current home and moving into a smaller property can free up cash while also reducing maintenance costs and property taxes – a popular choice for retirees in Southern Maine and New Hampshire.

WHY THIS MATTERS:

Exploring alternatives helps you compare not just the costs, but the trade-offs. For example, a reverse mortgage eliminates monthly payments but reduces home equity, while a refinance or HELOC requires ongoing payments but may leave more equity intact. Downsizing, meanwhile, can shift your entire retirement lifestyle.

Why Acadia Lending Group?

We’re not a national call center – we’re your local reverse mortgage experts, based right here in Southern Maine and licensed in both Maine and New Hampshire. Our loan officers understand the unique needs of New England homeowners, from rising property taxes to aging in place, and we provide personalized support through every step of the process.

🏆 Why Homeowners Trust Us:

• Over 550 5-Star Google Reviews and counting
• Over 500 reviews on Zillow
• Licensed in Maine & New Hampshire
• Proven reverse mortgage expertise
• Winners of Best Home Mortgage Lender – Best of the 207 for multiple years
• Better Business Bureau Accredited with an A+ Rating

Ready to Learn More?

Considering a reverse mortgage for yourself or a loved one?

Get a free, no-pressure consultation with one of our licensed loan officers. We’ll walk you through your options and help you make an informed decision, without the sales pitch.

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