Before deciding whether or not to obtain a Reverse Mortgage senior homeowners should analyze the pros and cons of the Reverse Mortgage loan program. Senior homeowners should really take note of the both the benefits and disadvantages of Reverse Mortgages.


  1. Reverse Mortgages do not need to be repaid during the lifetime of the borrower.
  2. Reverse Mortgage borrowers get to live in their home until they die.
  3. Reverse Mortgages allow borrowers to receive monthly checks while not making a payment.
  4. Cash payments received from Reverse Mortgages are not taxable.
  5. Neither the borrower nor the heirs will be personally liable if the Reverse Mortgage balance exceeds the home’s value.
  6. Heirs will receive remaining home equity after the Reverse Mortgage balance is paid off.
  7. Generally Reverse Mortgages do not impact Social Security or Medicare payments. However, borrowers considering Reverse Mortgages should seek professional advice about the potential impact to benefits.

Things to Consider



  1. FHA Limits prevent Reverse Mortgage lenders from utilizing the full value of the house.
  2. Ongoing FHA mortgage insurance premiums.
  3. Negative amortization causes unpaid principal balance to increase monthly which decreases the equity available to the heirs.
  4. Although not always the case, the loan origination fee might be higher than a traditional mortgage.
  5. Heirs will have to pay off the Reverse Mortgage in order to keep the house.
  6. Borrowers that fail to pay their property taxes, homeowner’s insurance and HOA payments might lose their house.