Reverse Mortgage and Long-Term Care – A Place for Mom

  • November 25, 2020
  • By: Greenpath Financial Wellness
  • GreenPath Financial Wellness is a trusted national nonprofit with more than 60-years of helping people build financial health and resiliency. Our NFCC-certified counselors give you options to manage credit card debt, student loans and homeownership.

The website A Place for Mom asked GreenPath to share details about taking on a reverse mortgage.  What are the pros and cons?

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While proceeds from selling your home is a common way people pay for long-term care facilities, a reverse mortgage may be helpful in circumstances where one or both parties are going to remain in the home,

The article shares that  reverse mortgages are sesigned to help retirees stay in their home longer, these loans are only available to people age 62 and older.

What is a Reverse Mortgage?

A reverse mortgage is a loan that’s borrowed from your home’s equity. Home equity is the difference between the appraised value of your home and what you owe on any mortgage.

You don’t have to pay the loan while you live in the home — it’s not due until the last borrower dies or moves from the home for one full year. Typically, the home is then sold and the proceeds go to repay the home equity amount borrowed plus interest. Any money remaining goes to the homeowner or the beneficiary.

One of the most common misconceptions about reverse mortgages is that you’re selling your house to the bank, says Skaggs. In fact, reverse mortgage borrowers maintain the title and ownership of their homes for the entirety of the loan. As long as you maintain the home and pay property taxes, you cannot be forced to move or repay the loan.


There are pros and cons to taking out a reverse mortgage. Certified counselors are ready to start a conversation.


Good Option to Fund Health Care Costs?

Maybe. Reverse mortgages have become a sought-after option as the pandemic has impacted many seniors’ retirement savings, says Jennifer Fraser, director of stakeholder engagement at GreenPath Financial Wellness, a HUD-approved nonprofit financial counseling group. “Reasons for obtaining a reverse mortgage still vary. Education is key. It’s important to review all financial options to determine which is best for the borrower’s specific situation and finances. One opportunity doesn’t always fit all.”

Because deciding whether a reverse mortgage is right for you can be complex, HUD requires everyone to meet with an independent financial counselor before applying for a HECM.

“Some borrowers fail to grasp that a reverse mortgage is an option to age in place. They must maintain the home as their primary residence and maintain communication with the lender and complete all requests, so they don’t inadvertently default,” says Fraser.

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Reverse Mortgage Resources

To explore this topic further, check out  how reverse mortgage counseling can help. 


Let’s Talk

Although we may not know all the pros and cons of a reverse mortgage as it pertains to your situation, we can find certainty in taking action on our finances.

GreenPath’s experts can walk you through your options when managing your household finances. 91% of people served by GreenPath feel better prepared to handle their finances. Together let’s make a plan for managing your full financial picture to support your goals.