Adult Child's Checklist
Evaluating a Reverse Mortgage for Mom or Dad

What problem are they solving?

Eliminating a mortgage payment? Supplementing income? Funding care? Creating a safety net? The "why" matters more than the "what."

Do they plan to stay in the home long-term?

A HECM makes the most sense if they're staying 5+ years. If they're likely to move within 2-3 years, the upfront costs may not be worth it.

Can they handle property taxes and insurance?

These are ongoing obligations. If there's a concern, a LESA can handle them automatically — but it reduces available equity.

Is the home in good condition?

The FHA appraisal checks for safety and habitability. Major issues (bad roof, failing HVAC) may need to be addressed before or at closing.

What disbursement method makes sense?

Line of credit (most flexible), monthly payments (predictable), or lump sum (specific need). The method affects how quickly equity is consumed.

Have they completed HUD counseling?

Mandatory and free (or ~$125). The counselor works for your parent, not the lender. Attend with permission if you can.

Is the lender legitimate?

Verify NMLS number at nmlsconsumeraccess.org. Check FHA approval. A good lender welcomes family involvement and answers every question.

Is anyone pressuring a fast decision?

Red flag. Legitimate HECM professionals encourage your parent to take their time. "Sign today" = walk away.

Is there a spouse under 62?

They need to be designated as a non-borrowing spouse for protection. This reduces the loan amount but keeps them in the home.

Is estate planning in order?

Power of attorney, will or trust, and clear communication with all heirs about the HECM and what to expect. No surprises.