Reverse Mortgage Do’s and Don’ts

the magic numbers:don't give up the fight
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The reverse home mortgage is a home equity loan available to seniors as a means of obtaining income from their homes. In positive situations, it can be a way for an older person to stay in his or her home despite a loss of income caused by retirement. It can even be used to invest in the home, create a profit, pay off additional rental property mortgages and establish financial security. However, bad choices (including using bad lenders and accepting bad terms) can make the reverse mortgage a negative situation instead of a positive one.

Here are some of the Do’s and Don’ts to follow when it comes to the reverse mortgage:


  • Review the different reverse mortgage loans available to you.
  • Get reverse mortgage counseling through a credible agency.
  • Consider all options for income in addition to the reverse mortgage.
  • Work with a financial adviser to budget the money from the reverse mortgage.
  • Approach the reverse mortgage as the first step in a financial plan.


  • Get a reverse mortgage loan because someone cold calls you and suggests it.
  • Work with a lender that is aggressive in any way.
  • Accept the first loan rate that is available.
  • Assume that there’s only one way to receive reverse mortgage payments.
  • Let the reverse mortgage be a “quick fix” instead of a thought-out financial plan.

In other words, the reverse mortgage works if you think it through. Make sure that you understand the terms of the reverse home mortgage loan including the stipulations associated with paying it back. And make sure that a third party (an adult child, a financial planner, etc.) is involved in assisting you to understand the loan.