Reverse Mortgages, Explained Without the Jargon
How a reverse mortgage works, who may qualify, and what happens to the home down the road.
5 Questions to Ask Before Signing a Reverse Mortgage
By LifeWell Compass Editorial Team · Published · Updated · 4 min readThis article contains partner links. We may earn a commission at no cost to you. Learn more
The questions that protect you, your spouse and your family before anything is signed.
For many retirees, a reverse mortgage can make life more comfortable, but it's a big decision. Take these five questions to every lender you talk to, and bring a family member or trusted friend along if you can.
1. What does it cost in total?
Ask for the upfront fees, insurance costs, closing costs and interest rate, in writing. Compare at least two or three offers.
2. Can I keep up with taxes, insurance and repairs?
You still own the home, so these costs don't go away. Falling behind can cause the loan to come due.
3. What happens to my spouse?
If your spouse isn't a borrower on the loan, ask exactly what protections they have to keep living in the home.
4. What does it mean for my family?
Talk with your heirs early. Explain their options: selling, refinancing or paying off the loan. Ask the lender how the loan's non-recourse terms apply.
5. Have I completed independent counseling?
A counseling session is typically required before closing, and it's a low-pressure place to ask anything.
Start with the numbers
Knowing what's possible makes every conversation easier. You can get a free estimate in a few minutes, then use these questions to compare offers. Estimates aren't a guarantee of approval or amount.
Bonus questions retirees often forget
- What if I need to move into assisted living? Ask how long you can be away from the home before the loan comes due.
- Can I still sell the home later? Yes, you can usually sell at any time and repay the loan from the proceeds.
- How will this affect my other income? Ask a tax or benefits advisor how the money may interact with any need-based assistance you receive.
Watch out for pressure
A trustworthy lender will give you time to think, answer every question in writing, and encourage you to talk with family. Be cautious of anyone who pushes you to sign quickly, or who wants you to use the money to buy other financial products, like annuities, on the spot.
Keep a simple folder
Keep every quote, disclosure and note in one folder, and write the date and the person's name on each page. It makes comparing offers much easier.
Reverse mortgages aren't right for everyone. Borrowers must keep paying property taxes, homeowners insurance and upkeep, and the loan balance grows over time. Eligibility and amounts vary by lender and are not guaranteed. LifeWell Compass is not a lender.
