10 Ways to Use a Reverse Mortgage

A reverse mortgage is a versatile financial tool that can be used for immediate needs or to plan for the future. How you use it will depend on your individual situation. And, while you can use your proceeds for anything, we’re providing a list of 10 ways our clients have used a reverse mortgage and how you can too.

Pay Off Your Existing Mortgage

One of the biggest benefits of the reverse mortgage is that it will pay off your existing mortgage and you won’t be required to make any monthly payment after. You can choose to make payments if you want, but the loan is not due until you move out of the home, pass away, or fail to uphold the financial obligations of the loan. Remember, even if your traditional mortgage is paid off, you need to continue paying your property taxes, homeowners insurance, and home maintenance costs to avoid foreclosure.

Pay for In-Home Care

Many people want to age in place, but medical problems could prevent that from happening. If you need medical help, in-home care could help you receive the needed assistance while remaining in the home. Unfortunately, this type of care can be costly. A reverse mortgage can help you pay for those costs while you continue to live in and own your home.

Make Home Improvements

Just as our bodies go through changes as we age – and may require a little more attention – so do our homes. Roofs, pipes, appliances, and other home features will need updates or full-on replacement at some point in their lives. Proceeds from a reverse could help pay for or curb these costs – especially those that are unexpected.

Consolidate Debts

Almost every debt accumulates interest. When you have a number of different debts, you also have a number of different interest charges building up as well. While you may not be able to pay off all of those debts at once, you may be able to consolidate them into one loan amount, so you only have one interest rate. The reverse mortgage is a loan, so if you use your proceeds to pay off other debts, you are essentially consolidating those debts into one loan, the reverse mortgage. We recommend speaking to a financial professional to figure out the best way of tackling debt.

Gain Access to More Money Later

If you don’t need money right away and want more proceeds later, get a reverse mortgage and leave the money untouched in the line of credit. All available funds in the line of credit will grow in value over time. In five years, you could have hundreds or even thousands of dollars more available to you. For an example of how the funds can grow, check out the scenario on our retirement tool page.

Allow Other Assets to Grow in Value

Just like a reverse mortgage line of credit, your other retirement assets can grow in value and provide access to more money later when they are left alone to increase. One example of this is Social Security. If you need money to live on while you defer drawing from other assets, use the proceeds from your reverse mortgage.

Purchase a Home

Did you know you can use a reverse mortgage to purchase a home and not have to make a mortgage payment for as long as you live in the home? Keep in mind that you will be required to make a significant down payment and you will still be required to pay the property taxes, homeowners insurance, and home maintenance costs on the new home to avoid foreclosure.

Create an Emergency Fund

Emergencies and unexpected costs can drain your savings. Keep that money safe by having an emergency fund to draw from when there is trouble. When you get your reverse mortgage proceeds, you can have a fully-funded emergency resource available right away.


Many people want to travel more in retirement, but this hobby can be expensive. If you are in good financial standing and can use some of your proceeds to enjoy travel and leisure, then do so. Your proceeds are available to use however you want, but we recommend responsible use.

Protect Your Home from Going Underwater

The reverse mortgage (whether a HECM or our HELO) is a non-recourse loan. That means you will never owe more on your loan than your home is worth. You may not need to worry so much about going underwater on your mortgage if your home value drops. With a reverse mortgage, you will only owe what your home is worth.

If you’re interested in learning more about how you can use a reverse mortgage for your specific needs and goals, give our licensed specialists a call.