What Is A Home Equity Conversion Mortgage?

A HECM reverse mortgage is a way to turn a portion of the equity in your home into cash. The proceeds from a reverse mortgage can be used to pay for unexpected expenses, such as nursing home costs or long-term care. It could also provide you with additional cash flow for all the expenses you have. As long as all loan terms are met, the loan does not require repayment until the last surviving borrower permanently moves out of the home, or passes away.


  • Borrower(s) must be 62 years or older
  • Must be homeowner and either own home outright or have significant equity; must live in home as primary residence (live there 6+ months per year)
  • Property must be a single-family home, 2- to 4-unit dwelling or FHA-approved condo
  • Must meet minimal credit and property requirements
  • Must receive reverse mortgage counseling from a HUD-approved counseling agency
  • Must not be delinquent on any federal debt

Potential Advantages:

  • Keep the title to their home
  • Tax-free cash from equity 30-60%*
  • As long as all loan terms are met, mortgage payments are optional; however, payment of taxes and insurance are required, and the home must be maintained.
  • Borrower must also live in the home as their primary residence.
  • Does NOT require repayment until last living borrower permanently leaves the home or loan terms are not met
  • Borrower may choose to sell the property, if they so wish
  • Never owe more than home value with HECM reverse mortgage loan**
  • Can purchase a home for 30-70% down***
  • Generally will not affect Social Security & Medicare*
  • Access a growing line of credit (applies to unused funds)

THE THREE BUCKETS… and The Sacred Cow of Home Equity

Many people feel that paying off their home and having no mortgage with lots of equity is the Holy Grail of retirement. Several people wait until their home is paid off before they retire and then feel they are safe to do so. The truth is that home equity is good, but it is not great because it is not liquid. In the face of fluctuating home prices along with nursing home and long-term care threats, it is typically better to have your equity in cash and in a form that you can control instead of relying on uncontrollable factors.

With people losing their homes in the depression era of the ‘30s and in the latest round of the housing foreclosure crisis starting in 2008, there are many people who feel that having a paid-off home in retirement is the safest way to go. The fact is that when a reverse mortgage enters the picture, the rules change because there is no payment and no risk of foreclosure as long as you live in the home as your primary residence and pay insurance and property taxes and maintain the home. (Of course you have to pay property taxes even if you don’t have a reverse mortgage.)

• Find out if a reverse mortgage is the right option for you
• Get personal guidance from a reverse mortgage expert

Reverse Mortgage in Bellingham

If you can use home equity without risk of foreclosure from missing payments, then the old rule of having a paid-off home in order to be secure may no longer be the best option. The truth is that a home is a great place to store memories but not a great place to store assets.

Once you understand that home equity is good, but cash is better, then the three buckets illustrated above will make a great deal of sense. During our earning years, we take money from the first bucket – W-2 Income – and put it into the second bucket – Retirement. What we also do is put quite a bit of our income into the third bucket – our home – purchasing it, making payments, improving it, etc. When we come to retirement, it is normal and expected to start drawing from bucket #2 (and stop contributing). Our first bucket decreases into just social security and pension income.

However, most people continue to put money into bucket #3 when they don’t need to. They sometimes continue to make payments when there is more than enough equity in bucket #3 that they should let that bucket take care of its own expenses as well as give them a cash flow that is not taxable. What they don’t realize is that with a reverse mortgage, they can take cash out of bucket #3 just like bucket #2. Note the direction of the arrows and how they should change to maximize your retirement income on the lower rectangle. If you adopt this strategy as proven by the Texas Tech research1 and Boston College for Retirement Research,2 your retirement funds will give you more income and be far more likely to outlast you! This is a big mental paradigm change. However, it is very important for you to understand that retirement rules, from taxation to home equity and especially long-term care issues, are simply very different from what happened during your earning years. Retirement is a different game and has different rules. The better you understand those rules, the better your retirement income will be. Let us explain why bucket #3 is so valuable for your retirement.


My husband and I were ready to take the next step in our life. We wanted to buy our first home. I knew nothing about buying a house! So I got on the phone and started to call around. Most people I talked to sounded too busy to answer my questions and just wanted me to fill out the application right away.

Then I call Fairway and I spoke with Louise. She was so kind and patient with me.

Jessica H

Marie’s best asset – besides being a top-notch lender ~ she thinks outside the box. If you have a buyer that wants to buy and a seller that wants to sell to that buyer, Marie will get it done… all legally, quickly and painlessly. She just has “that” ability to know how to review a buyer’s qualifications and then package a loan the correct way. She has taken several loan packages that were turned down and examined the faults and made them whole. She knows what the lender is looking for to make it a smooth transaction. I highly recommend Marie to my colleagues and clients.
Jo Anne Wyatt, Windermere

JoAnne W

Marie is an outstanding loan officer.  I’ve turned to her on advice regarding investment loans, reverse mortgages and many other loan types that require a high level of expertise.  She is always “in the know” and gives unconditionally to her clients.  It’s rare to have someone with so much knowledge and a heart of gold.  I would recommend her to anyone!

Keane N

As a licensed realtor and homeowner, I consulted with Marie several times in the last couple years. I heartily recommend Marie Bjornson for those interested in easy, no hassle loans. Here is a professional who gets loans approved when most others cannot. Her vast familiarity in all phases of the loan and banking industry, accompanied by her experience as a Lender and a Certified Public Accountant let you know right away that you are dealing with the best. Yet, what makes dealing with Marie Bjornson truly remarkable is her unfailing dedication to you, her client, to make the process simple and to ensure that you do not spend one dime more than necessary. I am always grateful for the kindness and care that Marie gives those I may refer to her.

Bob T

I tried to use Whidbey Island bank long story short, days before closing the underwriters decided not to approve me. They gave several reasons such as recent short sale and potential payment-shock. I was forced to look for a different lender and I’m so thankful to find Marie. Marie and her crew were able to foresee all the potential underwriting concerns and got this same mortgage through without any troubles. My experience with Marie is that she is hardworking, experienced and proactive.  If you are buying a house and especially if you have anything “tricky” with your situation–I highly recommend Marie. Lending now days has tough requirements and it’s nice to have someone as experienced as Marie for help. Today Marie continues to be willing to help me and recently sent a friend to her who had a great experience.

Paulo M

Marie Bjornson is the most awesome person to work with. Even when we felt it was a shot in the dark to ever own our own home, Marie assured us we will get there. She held our hand for over a year as we got ourselves in a home buying position. During that time Marie became more like a friend then a lender and her insights made all the difference. We plan on working with Marie again in the future for our next home-buying excursion. Fairway Mortgage in Bellingham is Fabulous!

Michelle D

For at least three years, we wanted to move from Chattanooga, Tennessee, to the Bellingham, Washington, area. We drove the 2,600 miles twice in the past three years to scope out the area in advance of my June 2017 retirement from teaching.

When we put our house on the market in Chattanooga, our real estate agent suggested Carol Cattle of Windermere Realty who in turn referred us to Marie Bjornson and Fairway Mortgage.

Jim D

Marie Bjornson and her Fairway Mortgage Team are hard-working, accurate, and thorough. Like many I think, we came in with our own set of challenges and through Marie’s creative thinking, dedication and initiative we were able to secure a mortgage and close on-time. Buying a house and securing a mortgage is nothing less than high-anxiety. I personally had more than one melt-down during the process and Marie and her team were wonderful and patient, talking me through the steps, answering all of my questions and allying the fears that arose.

Felicia J
I want to let you know that I was very impressed with your thoughtfulness and your ability to offer different options based on our goals. I have been getting home loans for 43 years and I’ve never been presented with the information like you presented yesterday.
You know you are my #1 pick, but this was really amazing. Thanks so much for persisting when I thought it was just option 1, 2 or 3. Option four was perfect.
Colleen M

Marie is friendly, professional and efficient. Her office staff complements the comfortable atmosphere she provides in her office. We thoroughly enjoyed meeting her and working with her on our Reverse Mortgage Loan (mortgage conversion).

Judyth S., Your Content Goes Here

I just closed on a difficult transaction with Marie as the lender and myself as the Seller and Buyer representative. Marie was very creative through the whole process and communicated extraordinaire. I could tell she really cared about the outcome for the client. We closed the transaction and both Seller and Buyer are more than pleased. I would recommend Marie for any financial needs, especially home purchasing.

Jim P

I just worked with one of the real estate agents that Marie recommends, and am so thrilled. I found the home I wanted but it sold before I could make an offer. A few weeks later that same property came back on the market. My real estate agent (along with Marie) helped me jump on it before others put in offers. I was the first in line with an offer this time and we closed the loan yesterday! (30 days from start to finish)

Also, who would have known there are so many choices and ways to do a loan … I didn’t, even though I have worked for Marie in the past.

Marla V

Kathy, our real estate agent, recommended Marie.  We were told she was the best.  Our goal was to get a mortgage for a condo in Birch Bay.  Marie was very creative and was able to think outside the box – she made it happen!  She was able to put all the puzzle pieces together.  We had a very difficult loan to deal with and she was able to get our rental home refinanced, a new car with the payments cut in half and our condo with the ocean view!

Mark M

My wife Becky and I have now purchased 11 homes in the past 43 years. This was the Least painful purchase we have ever experienced.
We really like the way Marie anticipated issues and got ahead of the game regarding needed documentation. The result was a very smooth closing and two very happy customers. Thank you, Marie.

Richard H
We are eternally grateful for Marie and her team. They far surpassed our expectations and made our dream home a reality. Marie takes a personal interest in each client’s scenario, and really makes some magic happen! Thanks, you guys! You’re awesome!
Joseph M

What can we say about Marie? We had no Realtor and no prior experience buying a house. We needed some “hand-holding” (understatement). Marie and her team took GREAT care of us! She worked TIRELESSLY to get us a great rate and saw us through the process from beginning to end. Do not hesitate to call her, she is a GEM!! Thank you Marie!

Kim D

Marie went way above and beyond the call of duty, 7 days a week, working with me and my realtor to help with numerous offers until we finally got one accepted in this insane market.

Scott N

What Is A Reverse Mortgage?

A reverse mortgage is a loan that is available to homeowners over the age of 62 that will allow them to convert part of the equity in their home into tax free cash. As long as these homeowners comply with the terms of the loan, (paying property taxes, homeowner’s insurance, maintaining your home) they do not have to make any monthly mortgage payments. This type of loan was created to help retirees with limited income to use their accumulated wealth to cover monthly living expenses. However, there is no restriction for how a reverse mortgage is used and many people use a reverse mortgage loan to purchase a home, payoff an existing mortgage, or as a line of credit.

What are the benefits?

  • Increased cash flow

  • No mortgage payments for rest of life

  • Low interest rates

  • Possible tax-free line of credit

  • Flexibility to make payments

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