Reverse Mortgages

There’s a lot of talk out there about mortgages, but what do you know about reverse mortgages? A reverse mortgage is a home equity loan for homeowners aged 62 and older. Essentially, it means you’re borrowing against your home’s equity while still maintaining ownership of the home. It can be a huge assist to your retirement planning by providing funds for the present time and the future, but it’s not for everyone. This blog will look at the pros and cons of reverse mortgages so you can better determine if this is the right option for you.



  • You continue to live in your home and retain ownership.
  • Flexible disbursement options – you can choose to receive your funds as a lump sum, monthly advances for a set period of time, a line of credit to tap as needed, or a combination of these options.
  • You can use the funds from your reverse mortgage loan to pay off your existing mortgage (there will still be a lien on your home for the outstanding amount of the reverse mortgage), freeing you from monthly mortgage payments.
  • Loan proceeds are generally not considered taxable income (always consult a tax professional for any tax advice).
  • A reverse mortgage loan shouldn’t affect Social Security or Medicare benefits, but you should always discuss with a financial professional to be sure.
  • If your home gains value after you take out the reverse mortgage loan, you can refinance your reverse mortgage to access greater proceeds.
  • After the loan is repaid, any remaining equity belongs to you or your beneficiaries.
  • Your beneficiaries or heirs are not liable if payoff balance exceeds home value.
  • Interest rates may be lower than other options.



  • Value of estate inheritance may decrease over time as proceeds are spent, meaning fewer assets available to leave to your heirs (you can still leave the home to your heirs, but then they will have to repay the loan balance).
  • Fees and other closing costs can be high.
  • The loan balance increases over time as fees and interest on the loan accumulate.
  • Although it shouldn’t affect Social Security and Medicare benefits, a reverse mortgage loan may affect Medicaid or SSI, which are needs-based programs (again, you’ll want to discuss with a financial professional).
  • Borrower must maintain their home and continue to pay property tax and homeowners insurance or the loan will become due.


If a reverse mortgage sounds like something that could benefit you and your plans for retirement, contact your bank or financial professional to get the ball rolling. If you aren’t at that stage in your life yet, but are looking to buy or sell your home, contact Advantage Real Estate today!