The pros and cons of a reverse mortgage

While accessing home equity with a reverse mortgage has many advantages, it’s not right for every situation. Weighing these key pros and cons can help you determine if this loan aligns with your financial goals and take the next step toward an informed decision:

Pros

  • Eliminate your monthly mortgage1

    A reverse mortgage pays off your existing mortgage (if any), freeing up your budget from those payments and leaving more cash in your pocket to use as you see fit.

  • Flexible payment options

    You can access any remaining equity in a way that best suits your lifestyle, including as a lump sum, monthly installments, or as a line of credit that’s ready when you need it.

  • Tax-free cash for virtually anything2

    Your loan proceeds are not considered income, which gives you access to usable cash without tapping other investments and creating a taxable event.

  • Continue to own and live in your home3

    The property title remains in your name, and you can continue living in your home as long as you wish, so long as you comply with the loan terms.

Cons

  • Loan balance accrues interest

    Because your funds come in the form of a loan against your home equity, the balance accrues interest and will grow over time.

  • Upfront costs

    Like many mortgage products, the loan has closing costs and fees, but many of these can be rolled into the loan and are not paid out of pocket.

  • Estate impacts

    Because the loan draws from equity and accrues interest on the amount borrowed, it is likely to impact what your heirs inherit. But regardless of how much equity remains when the loan comes due, they will not inherit the debt.

  • Potentially not enough

    There is a chance that your loan may not be enough to meet your needs, but even if your proceeds run out, you still own your home and can stay in it as long as you meet the loan requirements.3

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1The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.



2Not tax advice. Consult a tax professional.



3The right to remain in the home is contingent on paying property taxes and homeowner’s insurance, maintaining the home, and complying with the loan terms.

What is a reverse mortgage?

A reverse mortgage is a loan exclusively available to homeowners ages 55+4 that converts a portion of home equity into cash that can be used virtually any way you see fit. The loan balance grows over time and must be repaid when you sell the home, no longer use it as your primary residence, pass away, or don’t comply with the loan terms.

Unlock life on your terms

One of the largest pros of a reverse mortgage is the flexibility it gives you to make financial choices that fit your lifestyle. Whether it’s covering everyday expenses, planning for the future, or simply enjoying what life has to offer, your home equity can be used to help craft a future that works for you.

Get Peace of Mind

Reduce stress around money and gain the confidence of knowing you can stay in your home3 without monthly mortgage payments.1 With fewer financial burdens, you can focus on what truly matters—your health, happiness, and the freedom to enjoy life your way.

Enjoy Life’s Possibilities

Give yourself the flexibility to say “yes” to new opportunities and experiences – whether it’s renovations to make your forever home even more comfortable, a well-deserved vacation, or simply more room in your budget for the things that bring you joy.

Support Loved Ones

Whether it’s assisting a child with a home down payment, contributing to a grandchild’s education, or providing financial stability to your family, unlocking your home’s equity can help you create a lasting impact for those who matter most.

Get a free estimate

1The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.

3The right to remain in the home is contingent on paying property taxes and homeowner’s insurance, maintaining the home, and complying with the loan terms.

10,000+ customers rate us 4.7 stars

For over 20 years, homeowners across the country have trusted us to help them weigh the reverse mortgage pros and cons and make the best decision for their future.

March 6, 2025

The loan process was simple and straightforward

The representatives were knowledgeable, helpful and informative. Documents were requested early in the application process any there were no repeated requests.

March 6, 2025

From the beginning to the end

From the beginning to the end, I was impressed with the professionalism, honesty, knowledge from Finance of America. I was always informed and kept abreast every step of the way. Every call was answered or returned with a few minutes. All the numbers that were given matched up in the end.

February 5, 2025

My Reverse Mortgage Experience

Both, loan officer and loan processor provided exellent customer service all the way until my loan got closed. They were the nicest and friendliest professionals i have dealt with for a long time. A Reverse Mortgage with Finance of America is a good product. I am very happy with my decision to go with this company.

January 29, 2025

Great people to work with

Every person I spoke with was professional, helpful, knowledgeable, and friendly. I was kept advised of everything through the entire process. I would not hesitate to recommend this company.

January 25, 2024

Above my expectation!

This experience was so far above my expectations. Carla Fair made this process so easy and alleviated so much stress in my life. I’m disabled and house bound. At every point Carla was caring, helpful, empathetic, knowledgeable and just plain GREAT! I will refer everyone I know to her.

January 1, 2025

The entire process was made simple…

The entire process was made simple by those people whom I talked. From start through the end, they explained everything, and everyone was friendly and knowledgeable. I would recommend to anyone. Start to closing took about a month and 1/2 which is rather fast compared to past experiences.

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4.5 Stars by
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We’re ready to help

Call us at (877) 632-1183 or fill out the form below to connect with a licensed reverse mortgage specialist. Get your questions answered, receive a no-obligation estimate, and explore the pros and cons with someone who understands your specific situation.

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