How to Pay Off a Reverse Mortgage in California

Reverse mortgages don’t require monthly payments — but you can make them if you want to. And there are several other ways to repay or exit a reverse mortgage. Here’s everything California borrowers and their families need to know.

You Can Make Voluntary Payments Anytime

One of the least-known facts about reverse mortgages: you can make payments anytime, in any amount, without penalty. Voluntary payments reduce your loan balance, slow the interest accrual, and preserve more equity for you and your heirs.

Some borrowers make quarterly or annual lump sum payments to manage the balance. Others pay at least the interest each month — keeping the balance flat rather than growing. There are no prepayment penalties on HECM loans.

Ways to Pay Off a Reverse Mortgage

1. Sell the Home

The most common payoff method. At closing, the reverse mortgage balance is paid from sale proceeds. Any remaining equity goes to you (if you’re alive) or your heirs.

2. Refinance Into a Conventional Mortgage

If you want to eliminate the reverse mortgage and still own the home, you can refinance into a traditional forward mortgage. You’ll need sufficient income and credit to qualify. This is uncommon but works for borrowers who had a short-term need for the reverse mortgage funds.

3. Use Cash Savings

Pay off the balance outright using savings, inheritance, or other funds. The loan servicer will provide a payoff statement with the exact amount (balance + accrued interest to payoff date).

4. Heirs Pay at Death

When the last borrower passes away, heirs have 6–12 months to pay the balance by selling the home, refinancing, or paying directly. See our guide: What Happens to a Reverse Mortgage When You Die.

Requesting a Payoff Statement

Contact your loan servicer directly to request a payoff statement. They’ll provide the current balance plus per diem interest through an estimated payoff date. This is the amount you need to bring to fully satisfy the loan.

Can You Refinance a Reverse Mortgage Into Another Reverse Mortgage?

Yes — if interest rates drop significantly or your home has appreciated, you may be able to refinance your existing HECM into a new one with a higher principal limit. HUD requires that the benefit of refinancing is “substantially greater” than the closing costs (the 5x rule: new proceeds must exceed costs by at least 5x). We can analyze this for you.

Related: California Reverse Mortgage Guide | What Happens When You Die | Interest Rates 2026