The real pros and cons
No sales pitch — just the facts
JP Dauber, NMLS# 386298
Reverse Mortgage Specialist
Last updated March 15, 2026
Why I'm writing this honestly
I originate reverse mortgages for a living. I also believe that if a HECM isn't right for you, I'd rather you know that before we start — not after closing. This page is the honest version. No cheerleading, no scare tactics.
What's genuinely good about it
No monthly mortgage payments
This is the big one. If you're paying $1,500/month on a mortgage right now, that goes to $0. That's $18,000 a year back in your pocket.
You can never owe more than your home is worth
This is called non-recourse protection. Even if the loan balance grows bigger than your home's value, you and your heirs are off the hook. FHA insurance covers the gap.
Your line of credit grows over time
If you choose the line of credit option, the money you don't use gets bigger every year. No other loan does this. Financial planners love this feature as a retirement safety net.
You keep your home
Your name stays on the deed. You can sell anytime. You can renovate. You can leave it to your kids. The bank holds a lien — same as any mortgage — but you own it.
The proceeds aren't taxable
Reverse mortgage money is a loan advance, not income. You won't owe federal or state income tax on it.
What's not so great
The balance grows over time. Since you're not making payments, interest piles up. A $200,000 balance at 6% becomes roughly $360,000 after 10 years. That's less equity for you or your heirs. The non-recourse protection caps the damage, but the growth is real.
Upfront costs are higher than other loans. The FHA mortgage insurance alone is 2% of your home's value. Add the origination fee (up to $6,000) and closing costs, and you're looking at $14,000–$19,000 on a $400,000 home. Most can be rolled into the loan, but they still reduce your available funds. See the full cost breakdown.
Your heirs get less. Because the balance grows, there's less equity left when the home eventually passes to your family. This is the trade-off for not making payments. Read our inheritance guide for the full picture — it's more nuanced than it sounds.
You still have obligations. No mortgage payment, but you still have to pay property taxes, keep your insurance, and maintain the home. If you can't do those things, a reverse mortgage doesn't solve the underlying problem.
It's not great for short stays. Those upfront costs need time to make sense. If you're moving in 2-3 years, the costs are too high relative to the benefit. Five years is the minimum where the math usually works.
When it's a good fit
Staying put
You plan to live in your home for 5+ years and want to age in place.
Equity rich, cash tight
Your home is valuable but your monthly income doesn't stretch far enough.
Safety net seeker
You want a growing line of credit for future unknowns — even if you don't need the money today.
When it's probably not
If you're moving soon, can't afford your property taxes, have cheaper alternatives, or if anyone is pressuring you to decide quickly — stop. A reverse mortgage isn't a decision you make under pressure. Take your time, do your homework, and talk to a HUD counselor before committing.
Weigh it honestly
A reverse mortgage has real advantages and real costs. The right answer depends on your life, your finances, and your goals — not on what a TV ad or a scary article told you.
Want to see the actual numbers for your situation? Try our calculator — or talk to me directly. I'll tell you straight whether it makes sense.