How Do I Receive Payments from Reverse Mortgage?

When you take out a reverse mortgage (specifically a Home Equity Conversion Mortgage, or HECM), you’re tapping into the equity you’ve built in your home. The money is tax-free and can be received in a way that fits your financial goals. Here are your main options:

1. Monthly payments — just like a paycheck
You can set it up so you receive steady monthly payments for as long as you live in the home, or for a fixed number of years (your choice). This option is great if you want to supplement your retirement income and enjoy predictable cash flow every month.

2. A line of credit — funds when you need them
With this option, you get access to a reverse mortgage line of credit that you can use whenever you need it. The best part? You only borrow what you use, and any unused portion can grow over time. It’s like having a safety net available for emergencies, home repairs, medical bills, or future needs.

3. A lump sum — get your money all at once
If you have a large expense up front — like paying off an existing mortgage, medical bills, or funding a big project — you can choose to receive your funds as a single lump sum at closing. Just keep in mind: lump sum payments typically come with a fixed interest rate, and you may have access to only part of your equity, depending on program rules.

4. A combination of options
You don’t have to pick just one! Many borrowers choose a custom combination — for example, a small lump sum at closing to pay off their current mortgage, monthly payments to boost their retirement income, and a line of credit on standby for the future. This flexibility is what makes reverse mortgages such a smart solution for many retirees.
With a reverse mortgage, the “payment methods” aren’t about you making payments to the lender—unlike a traditional mortgage, you’re not on the hook for monthly bills. Instead, it’s about how the lender pays you, giving you access to your home’s equity. You get to pick how that money flows your way, and there are a few options to choose from.

No matter which option you choose, you remain the owner of your home, and you’re never required to make monthly mortgage payments (as long as you continue to meet the basic requirements — like living in the home, paying property taxes and insurance, and keeping the home in good condition).

Learn more about eligibility requirements for a reverse mortgage, situations where a reverse mortgage is best used, and common myths around reverse mortgage that we debunk with facts