Christopher Gibson
Reverse Mortgage Presentation
Example presentation · See what yours could look like
HECM Reverse Mortgage · Mutual of Omaha
Sample Scenario
~$869K home · Age 71 borrower
Home Value
$869,400
Liens Paid Off
$146,000
New Loan Balance
$172,869at close
Equity Remaining
$696,531~80%
Key loan metrics
HECM Adjustable Rate Mortgage with a growing Line of Credit. Insured by FHA.
Net Available
$177,499
Max Initial Advance
$37,352
Initial Advance
$0.00
Line of Credit
$177,499
Monthly Advance
$0.00
Home value$869,400
Maximum claim amount $869,400
Gross principal limit $350,368
Initial MIP $17,388
Existing liens paid at closing$146,000
Origination + closing costs $9,481
Cash to borrower at close$0
Line of Credit established$177,499
Initial loan balance (financed costs + payoff)$172,869
The Bottom Line
Your monthly mortgage payment becomes nothing.
No principal, no interest, no escrow for as long as you live in the home. You keep paying property taxes, insurance, and any HOA dues — same as today.
$0per month, every month
Your equity and Line of Credit over time
Drag the slider to see how each piece evolves. Hover the chart for exact values.
The unused portion of your HECM Line of Credit grows each month at the same rate being charged on the loan balance — currently the note rate plus the ongoing 0.50% MIP rate, roughly 6.05% per year at today's pricing. The growth happens whether home values rise or fall and is not capped at your home's value. Projection below assumes you leave the Line of Credit untouched and that today's rates continue.
Key statistics — Loan closing
Jump to:
Total Net Equity
$635,673
at close
Total net equity
$635,673
92% outside · 8% inside the Line of Credit
Outside the Line of Credit
$458,174
Inside the Line of Credit (on demand)
$177,499
Loan balance
$172,869
Assumes 4% annual home appreciation and 7% cost-to-sell for the net equity calculation. Line of Credit growth rate held constant at today's pricing. Initial Upfront MIP and closing costs are reflected in the Year 0 loan balance. These are illustrative projections — actual values depend on future interest rates, home appreciation, and any draws you take.
Build a custom draw schedule, or visualize the full 30-year projection as a chart.
What you could do with this
Four ways the Line of Credit tends to get used. None are exclusive — most clients mix and match over time.
Option 01 · The default
Leave it alone and let it grow.
Don't touch the Line of Credit. It compounds at the loan rate plus the MIP rate — roughly 6.05% per year at today's pricing. The growth is contractual, not tied to home values, and continues whether the housing market is up or down.
$177,499 today
↘ $324,553 at year 10
↘ $593,435 at year 20
↘ $324,553 at year 10
↘ $593,435 at year 20
Option 02 · One-time draws
Pay for projects, keep the rest growing.
Draw whatever you need — a new roof, a kitchen, helping a grandkid with college, a once-in-a-lifetime trip — and let the unused balance keep compounding. Each draw reduces what grows, but you stay in full control.
Draw $40,000 next year
↘ Remaining Line of Credit still grows to ~$240K by year 10
↘ Remaining Line of Credit still grows to ~$240K by year 10
Option 03 · Standby reserve
Keep it ready for what you can't predict.
A medical event, a roof failure, a market crash that hits your IRA — having a six-figure reserve you can draw on without selling stocks at a low or hitting up family is the most common reason HECMs get opened well before they're needed.
Untouched, available on demand
↘ No application or qualification when you actually need it
↘ No application or qualification when you actually need it
Option 04 · Monthly income
Convert to guaranteed payments.
Instead of a Line of Credit, you can take some or all of the proceeds as a monthly check. A "tenure" option pays for life. A "term" option pays a higher amount for a set number of years. You can switch between the Line of Credit and a payment plan later if your situation changes.
Tenure (lifetime): ~$1,155/mo
5-year term: ~$2,025/mo
5-year term: ~$2,025/mo
How a HECM actually works
Four things worth understanding before you decide.
01 · Who owns the home
You stay on title. Always.
A reverse mortgage is a loan against your home, not a sale of it. You remain the owner. The lender holds a mortgage just like any other home loan — the only structural difference is when and how the balance is repaid.
02 · When the loan is repaid
When you no longer live there as a primary residence.
Typically that's sale of the home, a permanent move, or passing. Your heirs have up to 12 months to sell the home, refinance, or pay off the loan with other funds. They keep any equity above the loan balance.
03 · Non-recourse
You will never owe more than the home is worth.
FHA insures the loan. If the loan balance ever exceeds the home's value at the time it's repaid, FHA covers the difference — never you, never your heirs. The home itself is the only collateral.
04 · The LINE OF CREDIT is the real story
It grows whether the housing market does or not.
The Line of Credit's growth is contractual — it's tied to your loan's interest rate, not home values. In a down market, your available Line of Credit keeps growing on schedule. This is the feature most people don't know about and is often the strongest reason to consider a HECM earlier rather than later.
Your family · How the loan ends
What happens to your heirs
The loan becomes due when you no longer live in the home as your primary residence — typically because of sale, a permanent move, or passing. At that point your heirs have up to 12 months to decide what to do. They have three real options, and FHA insurance protects them no matter which one they pick.
Home worth more than the loan
The home is sold, the loan is paid off, and your heirs keep every dollar of the remaining equity. In this example projection at year 20, that's roughly $1.19M of net equity remaining above the loan balance.
Home worth less than the loan
FHA insurance covers the gap. Your heirs owe nothing. The home itself is the only collateral — no other assets are ever pursued, even if the loan balance exceeds the home's value.
Heirs want to keep the home
They can refinance the HECM into a traditional mortgage in their own name, or pay off the loan with other funds. The payoff amount is the loan balance or 95% of the appraised value, whichever is less.
You and your heirs are protected
This is what the Initial MIP and ongoing MIP pay for: federal insurance that guarantees the home is the only thing at stake. Your other assets — your IRA, your accounts, your other property — are never reachable by this loan.
Important · Borrower Obligations
What you still have to do every year
As long as the loan is in place, you must occupy the home as your primary residence, keep property taxes current, maintain homeowners insurance, pay any HOA dues, and keep the home in reasonable condition. These are the same obligations you have today on your existing mortgage — they don't go away. Failure to meet them is the most common reason a HECM goes into default. HUD-approved counseling with an independent third party is required before you can submit an application; that counseling session typically takes about 90 minutes and costs around $125, paid directly to the counseling agency. By regulation, this is the only HECM fee that cannot be financed into the loan.
Ready to talk through your specific scenario?A 20-minute call covers your goals, the numbers, and the next step.
Call (206) 890-6132
What past clients say
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