While reverse mortgages are an option in several countries, in the United States, a homeowner must have reached 62 years of age when they apply for a reverse mortgage. In the case of married couples, at least one spouse must have reached 62 years old. The reverse mortgage must be the first and only mortgage on the home, or if a mortgage exists, it must be paid in full either with the proceeds of the reverse mortgage or with the homeowner's existing assets. The amount available in a reverse mortgage varies depending upon your age, the value of your home, and current interest rates. Older homeowners can receive more than younger ones While the homeowner may choose a variety of payout types for their reverse mortgage, the reverse mortgage does allow the homeowner to tap into a source of income during years in which they may require it. You may use the funds from a reverse mortgage to pay off debt, to cover daily living expenses, pay healthcare costs, make home improvements or travel. The funds from your reverse mortgage are yours to do with as you wish.

The government regulates reverse mortgages, providing homeowners with a number of protections. As long as you, or your surviving spouse, occupy the home, payments cannot come due, and your home cannot be taken. If the home is vacated for longer than a set period of time, sold, or the homeowner dies, the loan is then due. The amount due on a reverse mortgage can never exceed the value of the home. Counseling from an approved independent agency is required prior to the loan, and you have three days in which to reverse your decision. A reverse mortgage is a safe option to help meet your financial needs; however, if leaving your home to your heirs is important, a reverse mortgage eliminates this option. The fees associated with reverse mortgages may be high, and some homeowners may find a home equity loan or other possible resources a better choice. A reverse mortgage can be paid off prior to leaving the home if you choose, thereby allowing the home to be passed down in the family after the home is no longer occupied.

Many seniors will be concerned about how a reverse mortgage will impact federal benefits including Medicaid, Medicare and social security. While the funds from your reverse mortgage will not impact your Medicare or social security benefits, Medicaid benefits can be affected by a reverse mortgage. If you receive Medicaid, it may be beneficial to consult an eligibility specialist; however, typically as long as funds received are spent during the course of the month, this will not impact your benefits. A large lump sum payment, could, however, be a problem.

When considering a reverse mortgage, look at all available options. A reverse mortgage can provide a senior with a more comfortable lifestyle; however, it is not without some flaws. An independent counselor can help you fully understand the impact of a reverse mortgage on your financial future. Your home may be your most valuable asset as a senior, and using the equity in your home well can make your retirement years a happier and less worrisome time.