What Happens If A Person Outlives A Reverse Mortgage?

There are many senior citizens over the age of 62 who take out reverse mortgages to help provide themselves with extra income in retirement.  This article provides a warning about how reverse mortgages are often complicated and might not always be the best option.  Whether obtaining a reverse mortgage to help pay retirement expenses is a good idea often depends on that person’s individual situation.  Reverse mortgages are loans that people take out using the equity of their home as collateral, and these loans are paid out in monthly amounts.  The more money a person gets from a reverse mortgage the less equity they have in their house.  Not being in compliance with the terms of a reverse mortgage can cause a person to lose their home.  This article explains in more detail what it means to be in compliance with the terms of the loan. 

See Barbara A. Friedberg, A Reverse Mortgage: A Retirement Cushion…But Will You Outlive It?, Investopedia, April 7, 2016.