Pros: no monthly mortgage payment, tax-free* proceeds, a line of credit that grows, and non-recourse protection. Cons: upfront costs and MIP, equity is drawn down over time, and you must keep paying taxes, insurance, and upkeep. (*Consult a tax advisor.)
The advantages
✓ Pros
- No monthly principal & interest payment
- Proceeds are generally not taxable income*
- Adjustable line of credit grows over time
- Non-recourse: never owe more than the home’s value
- Stay in your home as long as you meet obligations
✗ Cons
- Upfront origination, MIP, and closing costs
- Reduces the equity/inheritance you leave
- You must keep taxes, insurance & upkeep current
- Moving out 12+ months can trigger repayment
- Not ideal if you plan to move soon
Who it fits
A reverse mortgage tends to fit homeowners who want to stay in their home long-term, have substantial equity, and want to eliminate a mortgage payment or create a standby line of credit for later. It fits less well if you plan to move soon or want to preserve maximum equity for heirs.
Frequently asked questions
Will my heirs be responsible for the balance?
No. It is a non-recourse loan. Heirs can repay and keep the home, or sell it; they never owe more than the home is worth.
Can I lose my home?
You can stay as long as you keep it as your primary residence and stay current on taxes, insurance, and upkeep. Falling behind on those can cause default.
Are the proceeds taxable?
Reverse mortgage proceeds are generally not treated as taxable income, but confirm with a tax advisor for your situation.
Save Financial is a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766). Figures are illustrative for 2026 and not an offer of credit.