By Debra West, Broker | The Debra West Team, RE/MAX Elite Group | Last updated November 4, 2026

According to the National Reverse Mortgage Lenders Association's RiskSpan index, homeowners age 62 and older held a record $14.92 trillion in home equity during the first quarter of 2026, an increase of an estimated $314.8 billion in senior home values for the quarter alone. (NRMLA/RiskSpan, July 2026)

For many homeowners, the right answer is to leave that equity alone. For others, downsizing or a traditional home-equity loan will do the job at a lower cost. A reverse mortgage should usually be further down the list. I've spent over three decades in the RE/MAX network working real estate transactions, and one thing experience teaches you: financial decisions involving your home rarely have one right answer for everybody.

A reverse mortgage isn't automatically a bad idea, but it's an expensive, complicated loan that's easy to misunderstand and hard to undo. It makes sense in a narrow set of circumstances, and whether you fit them depends on your age, your equity, your income, your family situation and how long you plan to stay in your home. Go in with your eyes open.

What Is a Reverse Mortgage?

A reverse mortgage is a loan secured by your home. The most common version is the Home Equity Conversion Mortgage (HECM), insured by the Federal Housing Administration.

HECM borrowers generally must be at least 62 years old, the home must be their principal residence, and the borrower must own the home outright or have enough equity to pay off an existing mortgage at closing. Borrowers must also continue paying property taxes, homeowners insurance and other required property charges, and HUD requires applicants to complete independent counseling with a HUD-approved reverse-mortgage counselor before closing. (HUD.gov)

Here's the key difference from a traditional mortgage: with a traditional loan, your payments gradually shrink what you owe. With a reverse mortgage, you generally make no monthly mortgage payment, so interest and fees are added to the balance and what you owe can grow over time. You still own the home — the lender doesn't simply take it — but your equity secures the money you receive.

Why This Matters for Wichita Falls Seniors

This is where the national numbers become a local story. Wichita Falls home values run well below the national average, which means seniors here typically carry less equity per household than in higher-cost markets — but for someone who has owned free and clear for decades, that equity can still represent a meaningful retirement resource, just at a different scale than the national headlines suggest.

Age matters here too. U.S. Census Bureau American Community Survey 5-year estimates show roughly 14.4% of Wichita Falls residents — about 14,763 people — are age 65 or older. That's a substantial share of our local homeowner base who may be weighing exactly this decision: stay in a paid-off or nearly paid-off home and find a way to supplement retirement income, or sell and downsize.

How Does a Reverse Mortgage Work?

Let's use a local example. The typical home value in Wichita Falls currently sits around $177,171. (Zillow Home Value Index, 2026) Suppose a homeowner here owns a house near that value and has paid off the mortgage or owes very little. Instead of selling to access that equity, they may qualify to borrow against part of it through a reverse mortgage.

How much? You can't borrow the full value. The amount available depends on the age of the youngest borrower or eligible non-borrowing spouse, current interest rates, and the home's value, subject to FHA program limits. As a rough guide, a borrower in their early 70s at today's rates might qualify for somewhere in the range of 35% to 50% of the home's value. On a $177,000 home, that's very roughly $60,000 to $90,000 — before upfront costs and any existing mortgage payoff come out. Your actual number will come from a lender's quote, so treat this as a ballpark only.

Funds can be structured as a lump sum, monthly payments, a line of credit, or a combination. For 2026, FHA raised the HECM maximum claim amount nationwide to $1,249,125, up from $1,209,750 in 2025, effective for case numbers assigned on or after January 1, 2026. (HUD, 2026 FHA Loan Limits) That ceiling matters most in high-cost coastal markets. On a home valued near the Wichita Falls typical value, the real constraint on your proceeds is your home's actual value and your age — not the federal cap.

The homeowner continues living in the property with no monthly mortgage payment on the reverse mortgage itself. But "no mortgage payment" doesn't mean "no housing expenses" — you're still responsible for property taxes, homeowners insurance, flood insurance where applicable, HOA dues, maintenance and repairs. Falling behind on these requirements can cause the loan to become due and payable.

Texas Adds Its Own Protections

Texas is one of the few states that writes reverse-mortgage rules directly into its constitution. Article XVI, Section 50(k) of the Texas Constitution sets state-level requirements on top of the federal HECM rules, including a written notice the borrower must receive at least 12 days before closing. That waiting period is a built-in chance to slow down, review the paperwork and talk with your family before you commit.

Texas also gives homeowners age 65 and older another option: you can defer property taxes on your homestead for as long as you own and live in it. (Texas Tax Code §33.06) The taxes aren't forgiven — they accrue interest at 5% a year and become due after the home stops being your homestead — but for a house-rich, cash-poor homeowner, deferral can relieve pressure without taking on a loan. Ask the Wichita Appraisal District or the county tax office how it works before you decide.

The Loan Balance Usually Grows Instead of Shrinks

This may be the single most important concept to understand. Picture a traditional mortgage as a bucket you're slowly emptying — every payment reduces what you owe. A reverse mortgage generally works the opposite way: interest and fees accumulate on the outstanding balance, so the debt can grow while your remaining equity shrinks.

The Consumer Financial Protection Bureau is direct about this: a reverse mortgage is not free money. It's a loan that eventually has to be resolved. (CFPB) The cash you get today is borrowed against your family's future, and the long-term cost is often far higher than homeowners expect.

Why Would Someone Consider One?

Consider a 75-year-old homeowner with little or no mortgage on a valuable, paid-for home who wants to stay put but doesn't have enough monthly retirement income to comfortably cover living expenses. That's what's often called "house rich and cash poor" — real wealth sitting in the walls of the house, but equity doesn't pay the electric bill or replace an air conditioner unless it's sold or borrowed against.

Worth knowing: Texas homeowners age 65 and older also qualify for a property tax break that eases this exact pressure. The over-65 homestead exemption adds an extra exemption on top of the standard homestead exemption and freezes school district taxes at the amount owed the year you turned 65. (Texas Comptroller) Wichita County homeowners can apply through the Wichita Appraisal District. It won't replace the cash flow a reverse mortgage might provide, but it's worth having in place regardless of which strategy you choose.

The Limited Upside

To be fair, there are real advantages for the right person — but each one comes with strings attached. The most obvious advantage is accessing equity while remaining in the home — significant for someone committed to aging in place. Proceeds can also eliminate an existing monthly mortgage payment (though the debt isn't gone, it's been replaced by the reverse mortgage) or fund living expenses, home improvements or other retirement needs.

The money you receive is loan proceeds, not income, so the IRS generally doesn't treat it as taxable income. (Confirm with your tax advisor for your situation.)

HECMs are also generally non-recourse loans. If the loan balance ultimately exceeds the home's value, eligible heirs aren't simply handed a bill for the difference — FHA mortgage insurance covers the gap when requirements are followed.

There's also a HECM for Purchase option, letting qualified borrowers 62 and older use a HECM to help buy a new principal residence. That can be useful for a homeowner who wants to sell a larger property, move closer to family, or downsize into a home better suited to retirement while limiting how much cash gets tied up in the new property. The same upfront costs and growing balance still apply, though.

The Real Costs Add Up Fast

This is where reverse mortgages lose a lot of homeowners — and for good reason. Under HUD's current HECM rules, borrowers pay an upfront FHA mortgage insurance premium of 2% of the maximum claim amount, plus an annual mortgage insurance premium of 0.5% of the outstanding balance. Origination fees can add up to $6,000, and appraisal, title and other settlement costs may apply on top of that. (HUD; CFPB)

If those costs are financed rather than paid out of pocket, they're added to the loan balance — meaning they accrue interest too. That's why I wouldn't evaluate a reverse mortgage by asking only "how much can I get?" I'd also ask, "what will this cost me over the time I realistically expect to own this home?" Those are very different questions.

Watch Out for Benefit Impacts

Reverse-mortgage proceeds generally don't count as income for Social Security or Medicare. But if you receive need-based benefits such as Medicaid or Supplemental Security Income (SSI), money you leave sitting in a bank account past the month you receive it can count as an asset and affect your eligibility. If that applies to you, talk with a benefits counselor or elder-law attorney about how and when to draw funds.

Watch Out for Scams and Pressure Sales

Older homeowners are frequent targets of reverse-mortgage scams and high-pressure pitches. Red flags include anyone who urges you to act quickly, pushes you to use the proceeds to buy an annuity, insurance or other investment product, offers a "free" home or a "government grant," or asks you to sign documents you don't understand. Legitimate lenders will wait while you complete HUD counseling and review everything with your family.

Your Remaining Equity Can Decline

Your home may keep appreciating, but your reverse-mortgage balance may keep growing too. That means the equity eventually available when you sell — or that remains for your heirs — could be substantially different from what it would have been without the loan. For homeowners who want to leave something to their children or grandchildren, that's a serious drawback. Some retirees decide that using their equity to live more comfortably is worth it — but too many families find out only after the borrower dies how much of the home's value is already gone. Understand that tradeoff before you sign, not after.

What If I'm Married and Only One of Us Is on the Loan?

This is one of the biggest worries for couples, especially when one spouse is younger than 62. Under HUD rules, an eligible non-borrowing spouse — one who was married to the borrower at closing, is named in the loan documents, and lives in the home — may be able to stay in the home after the borrower dies, as long as the taxes, insurance and other loan terms keep being met. However, that spouse can't draw any more money from the loan. Because a younger spouse reduces the amount you can borrow, some couples are tempted to leave that spouse off the loan entirely — get advice before you make that choice, since it directly affects whether your spouse can stay in the house.

What Happens When the Homeowner Dies?

The house doesn't simply become the lender's property when the borrower dies, but the reverse mortgage does have to be resolved. Once the last borrower has died — assuming there's no eligible surviving non-borrowing spouse with applicable protections — heirs generally can sell the home and repay the loan from the proceeds, keep the home by satisfying the balance (potentially with their own financing), or let the lender take the property to satisfy the debt.

If the home is worth more than the payoff, the remaining equity belongs to the estate or heirs after the debt and selling costs are paid. For example, if the home sells for $177,000 and the reverse-mortgage payoff is $100,000, roughly $77,000 of equity would remain before selling expenses.

One of the important protections built into FHA-insured HECMs: if the outstanding balance exceeds the home's value, heirs generally aren't required to cover the shortfall from their own assets. Heirs seeking to keep a HECM property can generally satisfy the debt by paying the loan balance or 95% of the home's appraised value, whichever is less. (CFPB)

That timeline is exactly why estate planning and family communication matter so much here. Your children shouldn't discover a reverse mortgage exists at your funeral and then start searching drawers to figure out who services the loan. Whoever handles your estate should know the servicer, roughly what's owed, where the statements are kept, and whether the family plans to sell or keep the property.

Reverse Mortgage vs. HELOC vs. Selling

A HELOC also lets you borrow against home equity, but unlike a reverse mortgage, HELOCs generally require monthly payments, qualification depends on income and credit, and rates are commonly adjustable. A home-equity loan provides a set amount with scheduled repayment, and a cash-out refinance replaces your existing mortgage with a larger one — both requiring monthly payments most retirees on fixed income would rather avoid.

Then there's the simplest option: sell the house. This is actually where our local market works in a senior homeowner's favor — because Wichita Falls home prices run well below the national average, the gap between selling your current home and buying something smaller or single-story is often narrower here than in higher-cost metros, which makes downsizing a genuinely competitive option against borrowing.

But sometimes selling isn't what the homeowner wants. Maybe the house is paid for. Maybe it's where the grandchildren gather. Maybe it's been home for 40 years. Financial decisions aren't made on spreadsheets alone — you have to weigh the numbers against the homeowner's actual goals.

Who Should Think Twice — and the Few Who Might Benefit

I'd steer most people away from a reverse mortgage if they expect to move within a few years, want to preserve maximum equity for heirs, struggle to keep up with taxes and insurance, don't fully understand the costs, or feel pressured to act quickly by a salesperson, seminar or advertisement.

A reverse mortgage may be worth a closer look only when a homeowner checks every box: substantial equity, plans to stay in the property long-term, needs additional retirement cash flow, can comfortably keep up with taxes, insurance and maintenance, and understands the loan will reduce equity available later. It can be particularly worth exploring when the alternative is selling a beloved home solely because monthly cash flow is tight.

Questions to Ask Before You Sign

• How much equity do I have today, and how much can I actually access?
• What are the upfront costs, and is the interest rate fixed or adjustable?
• How quickly could the balance grow, and what might I owe in five, ten or fifteen years?
• What happens if I need assisted living or am away from the home for an extended time?
• Can my spouse stay in the home if I die first?
• Will the proceeds affect any Medicaid or SSI benefits I receive?
• What will my children need to do when I die, and do I intend for them to keep this property?
• Would selling and downsizing leave me financially stronger?
• Would Texas's 65+ tax deferral, a HELOC or a home-equity loan accomplish the same goal at lower long-term cost?

And perhaps the most important question: what problem am I actually trying to solve? Don't start with the loan — start with the problem.

My Perspective as a Real Estate Broker

After decades in the RE/MAX network and thousands of transactions across Wichita Falls and North Texas, I've learned the best real estate decision isn't always the most obvious one. Markets change, interest rates change, families change, health changes, and retirement plans change along with all of it.

The record $14.92 trillion in equity held by Americans age 62 and older shows just how central housing has become to retirement wealth — and that's exactly why lenders are marketing so hard to tap it, including here in Wichita Falls.

In my experience, a reverse mortgage is the right answer far less often than the advertising suggests. It's expensive, it eats into what you leave your heirs, and it can create real complications for a family that isn't prepared for what happens when the borrower dies. For the right homeowner it can help, but I'd treat it as a last resort, not a first option. Talk with a qualified reverse-mortgage professional, complete the required HUD-approved counseling, talk with your financial and estate-planning advisors — and if selling, downsizing or purchasing another home might fit better, talk with a real estate broker who knows what your property is actually worth and what your local alternatives look like.

Your home may represent decades of work and one of the largest pieces of wealth you've built. Treat that equity like the valuable financial asset it is — the goal isn't simply accessing money, it's avoiding a decision today that you or your family will regret years from now.

Frequently Asked Questions

Can I lose my home with a reverse mortgage?

Yes — usually when the loan terms aren't met. The lender can call the loan due if you stop paying property taxes or homeowners insurance, let the home fall into disrepair, or no longer live there as your main residence. As long as you keep up with those obligations, you can generally stay for life.

Is reverse mortgage money taxable?

Generally no. The IRS treats reverse-mortgage proceeds as loan advances, not income. Check with a tax advisor about your own situation.

Do my kids have to pay back a reverse mortgage?

Not out of their own pockets. With an FHA-insured HECM, the debt is repaid from the home. If heirs want to keep the house, they can pay the loan balance or 95% of the appraised value, whichever is less. If the home is worth less than what's owed, FHA insurance covers the difference.

Can my spouse stay in the home if I die?

If your spouse is a co-borrower, yes. If your spouse is an eligible non-borrowing spouse named at closing, they may be able to stay as long as the loan terms are met, but they can't draw more money.

How much can I get from a reverse mortgage on a Wichita Falls home?

It depends on your age, interest rates and your home's value. As a rough guide, a borrower in their early 70s might access about 35% to 50% of the home's value before costs. On a typical Wichita Falls home, that's very roughly $60,000 to $90,000. A lender quote will give you the real number.

Is a reverse mortgage better than selling and downsizing in Wichita Falls?

Usually not. Because local home prices are below the national average, downsizing here often costs less than in bigger cities and can leave you with more equity in hand. Compare both options side by side before you decide.

This article is for general educational purposes and should not be considered financial, tax, legal or lending advice. Reverse-mortgage terms and individual circumstances vary. Consumers should consult appropriate licensed professionals and a HUD-approved HECM counselor before making a decision.

Sources: NRMLA/RiskSpan Reverse Mortgage Market Index, July 2026 · HUD 2026 FHA/HECM Loan Limits · HUD HECM program guidance · Consumer Financial Protection Bureau · U.S. Census Bureau American Community Survey · Zillow Home Value Index, Wichita Falls TX · Texas Constitution Art. XVI §50(k) · Texas Tax Code §33.06 · Texas Comptroller, Property Tax Exemptions · Wichita Appraisal District

The Debra West Team | RE/MAX