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Prior to applying for a reverse mortgage, you should familiarize yourself with all aspects of the transaction to ensure you make an informed decision about whether a reverse mortgage is right for you and your needs. We encourage you to consult the agencies and organizations listed below, review the Federal Trade Commission’s website, review the information provided by the Consumer Financial Protection Bureau, and/or seek loan counseling. 

Considering a Reverse Mortgage?

Proceed with Caution

  • Don't sign the loan documents unless you understand how a reverse mortgage works.
  • Know your options - you may have a better choice.
  • Have a serious talk with a counselor before you make any decisions. 

What is a Reverse Mortgage?

It is a loan

How does a Reverse Mortgage work? 

Important Questions

Yes - You can remain in the home until you move out or die.

No - If your partner is at least 62, consider whether she or he should be a co-borrower. Children and other dependents should be prepared to move when you die or move out of the home.

Yes - A reverse mortgage can help, but it is important to have other retirement resources too.

No - You could face foreclosure if you run out of money to pay property taxes, insurance, or other expenses in the future.

Yes - A reverse mortgage usually makes more sense the longer you live in your home. 

No - If a health issue or other event may cause you to move out soon, a reverse mortgage is an expensive way to cover short term cash needs.

Yes - It is usually best to wait, especially if you are in your 60s. 

No - Borrowing too soon can leave you without resources later in life. Remember to look at all your options first.

Consider Alternatives

If you decide on a Reverse Mortgage

Know your payout options

With a line of credit, you only pay interest on money you use. The amount of money available to you grows over time.

This can be a good choice if you need additional monthly income to cover daily living expenses. The amount of money available to you grows over time.

Borrowing a lot of money at once has risks. If you borrow more than you need, you will pay interest on all of it even if you don’t need it.

Know your product options

This allows you to borrow more, but you pay higher fees and costs.

This reverse mortgage allows you to borrow less, and pay lower fees and costs.

This reverse mortgage allows you to borrow for the purpose of buying a new home.

Before you make any decisions about a loan using your home:

Considering a lump-sum payout reverse mortgage?

If you take out a line of credit instead, the amount of money you can borrow will grow over time. If you take all the money upfront, you won’t be able to get money from your house later in life.

Be sure you need all of the money now.

If you are considering a lump-sum to pay off your current mortgage, make sure you look into refinancing or downsizing first.

You are required to go to housing counseling before you decide on a federally insured reverse mortgage.

Tell your counselor everything about your situation. Only a serious discussion with a counselor will give you the information you need to make a good decision about your home. Counseling before any decision involving your home is a good idea.

Visit HUD’s website or call HUD’s housing counselor referral line (1-800-569-4287) to find a qualified reverse mortgage counselor near you.

There are many counseling agencies that will discuss your options with you. A counselor can explain the loan costs, financial implications and potential alternatives to a reverse mortgage such as government and nonprofit programs. The counselor can also help you compare different types of reverse mortgages. The agencies and organizations listed below can provide you with more information pertaining to reverse mortgages and may help you locate a counseling agency.