Reversed Mortgages - Do You Have to Continue to Pay Your Property Taxes and Homeowner’s Insurance?

DDA Mortgage • August 3, 2022

The answer is yes. If you take out a reverse mortgage, you are required to pay taxes and homeowner's insurance.



Reverse mortgages are a way to convert your home equity into cash or a stream of payments. For seniors, they can be a great way to get the money they need without needing to liquidate other assets or sell their home.

Your reverse mortgage eliminates your principle and interest payments if you currently have a mortgage, and you can use the monthly payments or lump sum payments to pay your taxes and homeowner's insurance.



With a reverse mortgage, you receive money in the form of a line of credit that is based on your home's value and how much equity you have in it. You can take out either a lump sum payment or monthly payments.

A woman is sitting at a table using a laptop computer.

Remember, a reverse mortgage does not eliminate your obligation to pay property taxes and homeowner's insurance on your home. It only affects your monthly payments on your loan.



Reverse Mortgages: What They Are and How They Work


A reverse mortgage is a product offered by lenders that allows seniors to access the equity in their homes without selling them or moving out. The amount you receive from a reverse mortgage depends on how much equity you have in your home and how long you've been paying for it. You can use the money as lump sum payments or monthly payments.


You can use this money for any purpose you choose, such as paying off debt or helping with medical expenses. However, if you take out a reverse mortgage and fail to pay your taxes or homeowner's insurance, then your lender may foreclose on your home and take possession of it — even if they have not yet received any payments from you.


Want to learn more about your options?


Call us today at (727) 784-5555. Our Loan Officer Didier has 35 years of experience and knows how to walk clients through their options in terms they can understand.



If you have any questions about closing quickly, please feel free to ask using the form below.

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That Redfin data point—$13 trillion in housing wealth held by Americans 70+—is a big deal, and it ties into several powerful trends reshaping the housing and mortgage markets. What’s driving this record wealth? 1. Long-term home price appreciation Older homeowners bought decades ago at much lower prices and have benefited from massive appreciation, especially post-2020. 2. Low mortgage leverage Many in this age group either: Own their homes outright, or Have very small remaining balances So their equity = real wealth , not just paper gains. 3. Aging in place Instead of downsizing, many are staying put longer, allowing equity to continue compounding. Why this matters (big picture) 1. Supply constraint in housing Fewer older homeowners are selling, which: Keeps inventory tight Supports higher home prices This is one reason younger buyers are struggling to find affordable homes. 2. Wealth inequality across generations Younger generations: Face higher home prices Have less access to equity Meanwhile, older Americans control a disproportionate share of housing wealth. Implications for mortgage and lending 1. Rise of equity-based lending This trend directly fuels growth in: Reverse mortgages (HECMs) HELOCs Cash-out refinances That $13T is largely untapped liquidity . 2. “Living off equity” becomes more common With concerns around: Social Security stability Inflation More retirees are using housing wealth as: Income supplementation Emergency reserves 3. Intergenerational wealth transfer We’re seeing more: Parents helping kids with down payments Early inheritance strategies using home equity The hidden risk This isn’t risk-free: If home prices flatten or fall → equity shrinks Property taxes + insurance (especially in places like Florida) can pressure fixed-income retirees Liquidity is still “locked” unless accessed strategically Bottom line That $13 trillion figure isn’t just a stat—it represents a shift in where wealth lives in America : Housing is now the primary balance sheet asset for older Americans It’s becoming a retirement tool , not just a place to live And it’s quietly shaping everything from housing supply to lending innovation  Didier Malagies nmls212566 DDA Mortgage nmls324329
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