Reverse Mortgage Pros and Cons

Reverse mortgages can provide senior citizens with the money they need without adding another monthly payment to their budgets. They can be used at the recipient’s discretion, funding home repairs, preventing foreclosure, providing extra monthly income, or providing money for any other needs.

As with any lending arrangement, there are pros and cons to a reverse mortgage. Here are some of them:


  • You can get the money you need without placing an additional burden on yourself each month. A reverse mortgage does not have to be paid back until the homeowner moves out, sells the home, or dies.

  • You have several options to choose from regarding how you receive your money. You can receive the proceeds from your reverse mortgage in a lump sum, in monthly payments, or as a line of credit from which you may borrow as needed. You can even combine the options to have a line of credit and a monthly payment, a lump sum and a monthly payment, or a lump sum and a line of credit. This allows for great flexibility to meet your specific needs.

  • There is no monthly income requirement. Traditional mortgages require recipients to make a certain amount of money each month so that they will be able to make their monthly payments. But because a reverse mortgage requires no monthly payments, no income requirements exist. You can have $0 in monthly income and still qualify for a reverse mortgage.

  • The amount owed can never exceed the value of your home. In some situations you can borrow more money than your home is worth, but your debt will never exceed that amount.


The loan must be repaid in full when the owner ceases to occupy the home. You will have to pay back the mortgage if you ever move out. If you die while still living in the home, it will probably have to be sold to pay off the mortgage. That means that you can’t leave it to your children or anyone else.

If you still owe on your original mortgage, you will probably have to pay it off in order to obtain a reverse mortgage. Most reverse mortgage lenders require that the reverse mortgage be in the “first lien” position. If your equity is sufficient, you may be able to use funds from your reverse mortgage to do this, but it will reduce the amount of money you receive from it.

If you receive Medicaid, the funds you receive from a reverse mortgage could affect your eligibility. This can usually be avoided by only getting the money you need immediately from the reverse mortgage and spending it in the month in which you receive it. Otherwise, it will count toward your asset limit.

Defaulting on the reverse mortgage could cause you to lose your home. If you have already paid off the original mortgage on your home, you don’t have to worry about foreclosure. Getting a reverse mortgage puts a new lien on your home, and you could lose it if you default on the mortgage’s terms.

A reverse mortgage could be the answer to your financial difficulties if you are a senior homeowner. But it bears careful consideration before going forward.

If you would like more information about the reverse mortgage process and how it can possibly help you live out your retirement without the stress of financial burdens please call me or one of my team members at 877-787-1003 or send an email here:

We will be happy to provide a complete complimentary analysis of the amount of money you could expect to receive from the best available products.


James Barath, CMA, CMPS

Phone: 877-787-1003
Fax: 888-797-9062

Photo of James Barath, CMA, CMPS

James Barath, CMA, CMPS
Reverse Mortgage Specialist


Phone: 877-787-1003

We hope this site has been helpful. Please allow us to handle your Reverse Mortgage for you when you are ready.

Equal Housing Lender | Canopy NMLS 1359687

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