Is a reverse mortgage is a good or bad idea?

[hunterjmen]

Recently I have found myself in a tough spot.
I had my left leg amputated below the knee and money has been tight. Super tight. The extra kicker is my job doesn't have any work for me. So I am out of a job and walking on a prosthetic leg. My buddy suggested a reverse mortgage for my condo but I admit that I do not know much about them.

Are there pros or cons you know about that I should know about?

 

[Carnivore]

Sir we just had a conversation about this very topic. I have completed a number of reverse mtg appraisals . There are pro's and cons.
sorry for your injury. Were you self employed? If you were employed did file for workmans comp" Did you file for Social Security Disability?

Maybe the others will chime in soon, just be patient We don't get into the why people do what they do . We just appraise the property

 

[Surf Cat]

Sorry to hear that you're in a tough spot. That being said, I believe this is the wrong arena for you to inquire and learn about reverse mortgages. You can learn more with Google AI then you could here.

Not certain if you're disabled or not but if you are, you can talk to a HUD approved housing counselor. I'd also talk to my CPA about reverse mortgage implications.

In a valuation aspect ( what we do) The national condominium market is experiencing a significant downturn, with values decreasing in many areas of the U.S. Sorry for that cruddy news...

Do your due diligence and don't be hasty in desperation to sign anything without doing so.

Good luck

 

[alebrewer]

Surf is correct - you're just going to get a bunch of noise from this crowd. We appraise homes for reverses, but we aren't really involved in the transaction itself too much. Reverses can make a lot of sense and can also be disastrous - just depends on individual circumstances. Talk to a reverse mortgage specialist (remembering that they're trying to sell you a product) and also do research via an AI platform -chatGPT, perplexity, or similar.

 

[Zoe]

I don't know. Do you have children? Have you talked to them about it? What if you sold your condo and found something cheaper to live in? How much equity would you have in your condo if you sold it? My point is, you are basically borrowing any equity you have in your condominium and your condominium will likely go to the lender vs your children or anybody you know.

There are many factors to consider. I would consider a lawyer or a Certified public accountant to counsel me before I did it. I would want them reviewing all the loan papers before I signed the papers. If you have children, them too.

 

[Carnivore]

The man said I had my left leg amputated below the knee . walking on a prosthetic leg. So yes he is partially disabled

So he should go the nearest SS office if he hasn't already. and get that process started

 

[Surf Cat]

The man said I had my left leg amputated below the knee . walking on a prosthetic leg. So yes he is partially disabled

So he should go the nearest SS office if he hasn't already. and get that process started

That's why I asked if he was disabled. What I meant by that was he "officially" disabled. He has to prove that the amputation, despite the use of a prosthetic, prevents him from working.

Even if he's not officially disabled, I would still reach out to a HUD approved housing counselor.... they probably have a list of options, not just a reverse mortgage that can keep him in his home. If HUD can't help him because he's not officially disabled, maybe they can point him in a direction to someone who can.

Depending on his age, he may not have enough equity to last the rest of his life in a RM.

 

[Elliott]

Welcome to the Forum Hunter. Hopefully this link will work. Reverse Mortgages were discussed:

Thread 'Terrified of Reverse Mortgage but husband is pushing it'

Mar 6, 2026

To preface - I have the (prejudiced) opinion that all reverse mortgages are either scams or extremely unfair and hostile in their terms. OTOH my husband is sucked in and is pushing really hard to do it.

We have sold our house - and are buying a new construction, upper middle class house - cash - and he wants the extra cash (like $100K) to do improvements/upgrades and maybe live a little more luxurious (vs frugal). It makes a little sense - but I can't stop envisioning such a lien eating away equity - with terms that could force the instant sale of the house for some ridiculous lowball...

• walleyes
• mortgage reverse mortgage
• Replies: 23
• Forum: Fannie Mae, Freddie Mac, USPAP

"Yes, a person with very low income can qualify for a reverse mortgage because there are no minimum income requirements
. Instead, lenders conduct a financial assessment to ensure you have enough income or cash reserves to cover ongoing property taxes, homeowner's insurance, and home maintenance.
Key Considerations for Low-Income Applicants:

• Asset Requirement: You must have significant home equity, often owning the home outright or having a low mortgage balance.
• Financial Assessment: Lenders will evaluate your ability to pay for property charges, but low income does not automatically disqualify you.
• "Life Expectancy Set-Aside" (LESA): If your income is too low to cover taxes and insurance, the lender may require a LESA, which sets aside a portion of the loan funds to pay these expenses.
• Mandatory Counseling: You must complete a session with a HUD-approved counselor to discuss the loan's impact on your finances.
• Disqualifiers: Delinquent federal debt (e.g., taxes, student loans) can disqualify you, even if you have enough income.

Essentially, if you own your home, are 62 or older, and can show you can manage the property expenses, you may qualify regardless of low income."

 

[sputnam]

Recently I have found myself in a tough spot.
I had my left leg amputated below the knee and money has been tight. Super tight. The extra kicker is my job doesn't have any work for me. So I am out of a job and walking on a prosthetic leg. My buddy suggested a reverse mortgage for my condo but I admit that I do not know much about them.

Are there pros or cons you know about that I should know about?

A reverse mortgage is a type of annuity and should be thought of that way. It trades capital you own (the equity in your property) for a monthly payment for life. The amount of payment will be based on how much equity there is, current interest rates, and on how long an actuary says you are likely to live.

 

[Zoe]

I think you can probably back out of it if you want to, but the lender will still get a substantial amount of the equity if you try to back out early. You will have to pay some kind of penalty if you back out early.