Reverse Mortgages in CT: What Homeowners 62+ Should Actually Know

Someone's mom saw the ad. Now what?

I get this call a decade after the TV commercial ran. An adult kid, usually, asking me whether their parent should do a reverse mortgage because Tom Selleck made it sound simple. It's not a scam. But it's also not the simple retirement fix the ads make it look like. It's a real tool that works well for a specific situation and works badly for a lot of others.

Basically, a reverse mortgage - the federally-insured version is called a HECM, Home Equity Conversion Mortgage - lets a homeowner 62 or older borrow against the equity in their house without making monthly payments. The loan gets repaid when the borrower sells, moves out permanently, or passes away. It sounds like free money. It is not free money. It's a loan, and loans have costs. This one has a few features you need to understand before anyone signs anything.

In Connecticut specifically, this conversation matters more than in a lot of other states. We've got high home values in towns like Glastonbury, Simsbury, and Farmington, which means more equity to tap. We also have some of the higher property tax burdens in the country. Both of those facts matter for this decision, and I'll get to why.

Who actually qualifies - it's not just your age

The headline requirement is age 62. If there are co-borrowers on the loan - a married couple, say - both have to be 62 or older. That's federal, not negotiable.

But age is just the entry ticket. Here's what else matters:

• It has to be your primary residence. Not a rental, not a second home in the Berkshires. The house you actually live in most of the year.
• You need sufficient equity. If you still owe a lot on your current mortgage, the reverse mortgage has to pay that off first out of the proceeds. Less existing debt means more available to you.
• You have to keep up with the house. Property taxes, insurance, basic maintenance. This is not a one-time approval and forget it. It's ongoing.
• You go through financial assessment. Lenders check that you can realistically handle the taxes and insurance going forward, not just today.

That last point is the one people miss. They hear no monthly payment and assume the house is basically free to live in from that point forward. It's not. Hamden carries one of the highest effective tax burdens in the state - north of 3.6% of market value annually - and East Hartford and Waterbury aren't far behind. That ongoing carrying cost is a real number every single year, reverse mortgage or not. The tax bill never takes a year off.

HECM vs. HELOC vs. just selling - the actual differences

This is the part nobody explains clearly. A reverse mortgage, a HELOC, and selling the house outright all touch the same pile of equity, but they work completely differently.

A HELOC requires income to qualify and a monthly payment to service. If you're on a fixed retirement income, that can be a hard qualify, and missing payments has consequences fast. A reverse mortgage doesn't require that monthly payment - the interest just gets added to the balance. Selling outright gets you full market value in cash, but then you need somewhere else to live, and moving at 75 or 80 is its own kind of hard.

Neither option is universally right. A homeowner sitting on substantial equity who wants to stay in their house and doesn't need to leave a big inheritance behind might be a great fit for a HECM. A homeowner who's already thinking about downsizing to something smaller, or moving closer to family, is often better off just selling and using the full proceeds toward the next place.

The counseling session CT law actually requires

Here's something the TV ad definitely does not mention: in Connecticut, a lender legally cannot take your final application or charge you a fee until you've completed counseling from a HUD-approved housing counseling agency. This isn't a suggestion or a nice-to-have. It's state law, and it's there because reverse mortgages are complicated enough that regulators wanted a neutral third party explaining the tradeoffs before money changes hands.

So before anything gets locked in, the lender has to tell you the counseling requirement exists, hand you a list of approved agencies, and get a signed certificate back proving you actually sat through the session. Federal law backs this up too - it's not just a Connecticut quirk, but Connecticut has its own statute spelling out exactly how the lender has to handle it.

A slower process with more disclosure is the safer one, full stop. If you're 62+ and looking into this, expect the counseling appointment before anything else happens. Treat it as the most useful hour in the whole process, not a hoop to jump through.

Nonrecourse protection - the one genuinely good feature

This is the part of a HECM that actually is as good as advertised. These loans are nonrecourse. That means if the loan balance ever grows larger than what the home is worth when it's time to repay - because interest accrued for years, because the market dipped, whatever the reason - neither you nor your heirs owe the difference.

The home gets sold to satisfy the debt, and the lender's insurance (this is FHA-backed) covers any shortfall. Your heirs are never on the hook for more than the home's value. That's baked into the federal program, not something a specific lender is being generous about.

That higher 2026 limit matters more here than in a lot of states, because Connecticut has real equity sitting in homes in towns like Glastonbury, Westport, and Ridgefield. A higher lending ceiling means homeowners with substantial home values can access more of that equity through a HECM than they could a year ago. It doesn't mean everyone should - it just means the ceiling moved up.

What this actually costs you over time

Here's the tradeoff nobody puts in the commercial. Every year you don't make a payment, interest gets added to the loan balance. That balance grows. Meanwhile, your equity - the part of the house that's actually yours, that could go to your kids or fund a move to assisted living later - shrinks by the same amount.

That's not a defect in the product. It's how it's designed to work. But it means a reverse mortgage taken at 65 looks very different by the time someone's 85. If you're planning to leave the house to your kids, or you think there's a real chance you'll want to sell and move within ten years, run those numbers before you sign anything. This is the single most important conversation to have honestly with your family before moving forward, not after.

• Ongoing costs you still pay: property taxes, homeowners insurance, HOA dues if applicable, basic upkeep.
• What shrinks over time: your remaining equity, as interest compounds on the loan balance.
• What never happens: you or your heirs owing more than the home is worth, thanks to nonrecourse protection.

And here's where the Connecticut property tax picture cuts both ways. Higher home values in towns like Simsbury or Avon mean more equity available through a HECM. But those same towns carry moderate tax burdens around 2.3%, while higher-tax areas like Manchester and Newington run closer to 2.8% - and that annual bill has to keep getting paid regardless of the loan. A reverse mortgage gives you cash flow relief on the mortgage side. It does nothing for the tax bill. Some homeowners use part of the loan proceeds specifically to cover taxes and insurance going forward - that's a legitimate strategy, but it accelerates how fast the balance grows. The tax bill doesn't care how you're paying for it.

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