Reverse Mortgage Pros & Cons

In order to decide if a reverse mortgage is the right choice for you, it is important to know both the pros and the cons of this financial product.

Reverse Mortgage Pros

A reverse mortgage can be an extremely helpful tool for people who wish to convert their home’s equity into cash.


  • No Monthly Mortgage Payment
    Gives you the opportunity to age in place with no monthly mortgage payment.

  • Insured
    Is insured by the federal government.

  • No Prepayment Penalties
    Will NEVER have a prepayment penalty.

  • Liquidates Equity
    Liquidates your home’s equity for you to use as you choose.

  • No Additional Income Tax
    Does not require you to pay additional income tax.

  • No Minimum Credit Rating
    Does not require you to have a minimum income or credit rating.



  • Non-Recourse
    Is non-recourse, meaning you can never owe more than your home’s value.

  • Access To Additional Funds
    Gives you the opportunity to gain access to additional funds to cover expenses.

  • No Repayment
    Requires no repayment as long as you remain in the home and remain current on the loan requirements.

  • Finance Fees
    Gives you the opportunity to finance any fees so there are little to no out of pocket costs.

  • Flexible Payout Options
    Allows you to choose one of 5 flexible payout options for any funds from it.


Reverse Mortgage Cons

Though none of a reverse mortgage’s features are specifically negative, it is important to understand any financial product completely before making a decision.


  • Higher Up Front Fees
    Could have higher up front fees than other types of financing

  • May Become Due
    When you still live in the home if you do not remain current on the loan terms

  • Could Affect Eligibility
    For need-based benefits like Medicaid and Supplemental Security Income



  • Reduce Equity
    May reduce the amount of equity left to your heirs

  • No Income Interest Deductions
    Does not allow any income interest deductions on your taxes until the loan becomes due

  • Prevent Equity
    Could prevent you from having equity in the future


More About Us

Reverse Mortgage Information gives you information on reverse mortgages in a simple format that can be easily understood by anyone.