You are here

Is a reverse mortgage right for you?

Share this page

You see the ads on TV, in the newspaper, and online. They push the benefits of a reverse mortgage for homeowners over 62: pay off your existing mortgage, supplement your income, pay for healthcare expenses, and more. But is a reverse mortgage right for you? That depends. While a reverse mortgage may increase your monthly income, it can put your retirement security at risk if you’re not careful.

Reverse mortgages take part of the equity in your home and convert it into payments to you. The money you get usually is tax-free, and it generally won’t affect your Social Security or Medicare benefits. But a reverse mortgage is not all sunshine and roses.

Here are some things to consider:

  • A reverse mortgage does not guarantee financial security no matter how long you live.
  • There are fees and other costs, like an origination fee and other closing costs, as well as servicing fees over the life of the mortgage.
  • Interest is added onto the balance you owe each month. That means the amount you owe grows as the interest on your loan adds up over time.
  • Interest is not tax deductible until the loan is paid off, either partially or in full.
  • You have to pay property taxes, insurance, utilities, fuel, maintenance, and other expenses. If you don’t pay your property taxes, keep homeowner’s insurance, or maintain your home, the lender might require you to repay your loan.
  • Reverse mortgages can use up the equity in your home, which means fewer assets for you and your heirs.
  • Generally, you don’t have to pay back the money for as long as you live in your home. But when you die, sell your home, or move out, you, your spouse or your estate must repay the loan. That might mean selling the home to get money to repay the loan.

Learn more by reading the FTC’s recently updated article, Reverse Mortgages.

Blog Topics: 
Homes & Mortgages


It always sounds too good to be true , More like a big long scam

This is truly a scam perpetrated by greedy bankers on fragile seniors.


Leave it to the Goverment to get in bed with banks to come up with this.

protect your parents!!!!

We're gonna do it. We still owe mortgage payments on our home to the tune of $13,500 a year, but by getting a reverse mortgage that $13.5k will go away, and we'll have a $105,000 credit line making a bit over 5% interest per year (which we don't need at this time, so it will accumulate at compound interest). It's not as good as stock market returns may be, but we're not exactly counting on a continued bull market that has been ongoing for 7 years now, already.

My husband is 63 and I'm 61. I have filed for SSDI and my spouse receives Social Security. I'm not working and our only income is his monthly SS pmts. Our house is paid off and we need to have some type of emergency cushion. Should we use a reverse mortgage or can we do something else. I won't be able to collect social security until February 2019.

Leave a Comment