Is a Reverse Mortgage a Good Idea?

A reverse mortgage can be a good idea for homeowners 62 and older who have significant home equity, plan to stay in their home long-term, and want to eliminate their monthly mortgage payment or supplement retirement income. It is most beneficial when used as part of a deliberate retirement plan — for example, establishing a growing line of credit, delaying Social Security, or covering healthcare costs. It is generally a poor fit if you plan to move soon, if heirs need to inherit the home free and clear, or if you may struggle to keep up with property taxes and insurance, since those obligations remain. Because a HECM is FHA-insured and non-recourse, you or your heirs will never owe more than the home is worth. The right answer depends on your goals, so an honest, no-pressure review of the pros and cons with a licensed advisor is the best first step.