Who Might Consider a Reverse Mortgage
A reverse mortgage isn’t for every family, but for some it can be a lifeline. At its core, a reverse mortgage allows homeowners who are 62 and older to borrow against their home’s equity without having to make monthly payments. The loan gets repaid when the homeowner moves out, sells the house, or passes away.
Here’s who might benefit:
- Seniors who don’t have a lot of cash on hand, but are “house-rich”, especially those with limited retirement income.
- Families are trying to fund long-term care services like in-home help, assisted living, or home modifications.
- Adult children are looking for ways to reduce the financial burden of caregiving without draining their savings.
- Homeowners who plan to age in place and want to turn home equity into income while still living there.
To qualify for a reverse mortgage, your parent must:
- Be at least 62 years old.
- Live in the home as their primary residence.
- Own the home outright or have a low remaining mortgage balance.
- Stay up-to-date with property taxes, insurance, and home maintenance.
- Participate in a government-mandated counseling session.
Home Equity Conversion Mortgage (HECM) are the most common reverse mortgages, and they are insured by the FHA and offer more protections for borrowers and heirs than other types of reverse mortgages.
Compare the Best Reverse Mortgage Companies
Amber’s Story: Why She Considered a Reverse Mortgage
A few months ago, Amber sat at her parents’ kitchen table with her sister, going through a pile of medical bills and care estimates. Their mom has early-stage dementia, and while their dad is still relatively independent, it’s clear that things are going to get harder before they get easier. They’d just gotten a quote for part-time in-home care for over $3,000 a month. The sisters could see the stress written all over their dad’s face. Their retirement savings weren’t built for this kind of expense.
That’s when Amber started digging. She came across a forum post from someone who said they had to cash out their 401(k) early to help cover their mom’s memory care bills. They said they regretted not talking to their parents sooner about using the house as a resource. It hit close to home. Sarah’s parents’ house is paid off and worth more than any other asset they had set aside for retirement, but they had never talked about it, and it felt off-limits.
So Sarah talked. It was messy. Her dad didn’t love the idea at first, saying he wanted to “leave something behind for the rest of the family to enjoy.” But when Sarah showed him that a reverse mortgage might help him stay in the home he loves while giving his wife the care she needed, he listened. Now Sarah is exploring options together with her dad. Here’s what they learned.
Moving Forward with Reverse Mortgage Options
Once you’ve decided to explore a reverse mortgage, here’s what the process usually looks like:
- Research Lenders
Not all lenders are created equal. Look for those with strong reputations, no high-pressure sales tactics, and a solid track record with reverse mortgages specifically. - Schedule HUD-Approved Counseling
Counseling is required to ensure your parents understand the terms, fees, and implications. It’s a helpful step, not just a box to check. - Apply for the Loan
Your lender will assess your parents’ finances, home value, and eligibility. This can include a credit check and a review of property condition. - Choose a Payment Option
You can opt for a lump sum, monthly payments, a line of credit, or a combination. Many Redditors have said that a line of credit with growth is a smart strategy. - Close and Access Funds
Once approved, your parents can start receiving funds, which they can use for in-home care, medical bills, or other long-term care needs.
Risk Factors of Reverse Mortgages
While a reverse mortgage can be a financial solution for some families, it’s not without serious considerations:
- Home Equity Shrinks: The longer the loan runs, the more interest accumulates. This reduces how much equity is left for heirs.
- Fees and Costs: Origination fees, mortgage insurance, closing costs, and servicing fees can add up. Always get a full breakdown.
- Must Maintain the Home: Your parents are still responsible for property taxes, insurance, and upkeep. If they fall behind, they risk default.
- Impacts Inheritance: When the homeowner passes away, the loan must be repaid, often by selling the home. If heirs want to keep it, they’ll have to pay off the balance.
- Scams Exist: Some companies prey on vulnerable seniors. Only work with licensed, transparent lenders.
Recommended Reverse Mortgage Providers for 2025
These providers often receive positive feedback when people share their real-life experiences.
1. LongBridge Financial
- Why Reddit Likes It: Straightforward communication, solid customer service, and a low-pressure sales approach.
- Standouts: Competitive rates and multiple disbursement options.
- Best For: Families new to the reverse mortgage space who want hand-holding and transparency.
2. Finance of America Reverse
- Why Reddit Likes It: Offers flexible HECM options and proprietary loans for higher-value homes.
- Standouts: Clear resources for both adult children and borrowers.
- Best For: Homeowners with above-average home equity who want custom-fit solutions.
3. Mutual of Omaha Reverse Mortgage
- Why Reddit Likes It: Reputable, longstanding brand. Solid reviews on counseling support and customer service.
- Standouts: A good option for those seeking a balance of traditional service with newer technology.
- Best For: Seniors who trust big-name financial institutions.
4. American Advisors Group (AAG)
- Why Reddit Has Mixed Reviews: Some love the service, others feel the sales push was too much.
- Standouts: Nationally recognized and heavily marketed.
- Best For: Confident buyers who can sift through marketing noise to get what they need.
5. Reverse Mortgage Funding (RMF)
- Why Reddit Likes It: Helpful loan officers and a user-friendly quotes process.
- Standouts: Consistent experience in both lump sum and line of credit options.
- Best For: Seniors who want fast answers and digital-first service.
Final Thoughts: Choosing the Right Reverse Mortgage Provider
This isn’t something Sarah ever thought she’d be researching in her 30s. But aging parents come with real-life problems like medical needs, financial gaps, and hard decisions we’re often not prepared for as children. A reverse mortgage isn’t a perfect answer, but for Sarah’s family, it was a potential tool to help keep her parents in their home while getting her mother the care she deserves.
If you’re in a similar spot and staring down growing care costs and dwindling savings, don’t wait to have the tough conversations. The earlier you start, the more options you have. And the more empowered your parents feel, too.
Frequently asked questions
We answer the questions that matter most about the best reverse mortgages.
A reverse mortgage lets homeowners aged 62 or older convert part of their home’s equity into cash without selling or making monthly mortgage payments. The most common type, the Home Equity Conversion Mortgage (HECM), is backed by the FHA. The loan is repaid when the homeowner sells the home, moves out permanently, or passes away.
Yes, they retain full ownership. However, they must continue to live in the home, maintain it, and stay current on property taxes and homeowners’ insurance. If they fail to meet these obligations, the loan could go into default.
When your parents pass away or permanently leave the home, the loan becomes due. Heirs can choose to repay the loan and keep the house, or sell the property and use the proceeds to repay the lender. Any remaining equity goes to the heirs. If the loan balance exceeds the home’s value, FHA insurance covers the difference—heirs aren’t personally responsible for the shortfall.
Yes. Reverse mortgages come with fees, interest that accrues over time, and potential impacts on inheritance. If your parents fall behind on taxes or insurance, they could risk foreclosure. It also reduces the equity available to heirs. That’s why counseling is required before signing. A HUD-approved counselor will help ensure the family understands the whole picture.