ACCC Explains The Pros And Cons Of Reverse Mortgage

ACCC explains what every senior should know before considering a reverse mortgage.

Boston, MA – May 3, 2017

Pros and Cons of a Reverse MortgageCome retirement, many people feel as if they have not saved enough to live comfortably. A reverse mortgage can assist in providing a tax-free cash flow to eligible homeowners 62 years of age or older. It can also provide seniors financial independence and the ability to age longer in their home. On the other hand, reverse mortgages can also mean expensive credit and more debt. National nonprofit American Consumer Credit Counseling explains the pros and cons of reverse mortgages and highlights what every senior should consider before obtaining one.

“Money from a reverse mortgage can provide seniors with the financial security they need to enjoy their retirement years in their own home,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “It’s important that seniors learn about the benefits and drawbacks so they can decide if a reverse mortgage is right for them. The biggest advantage is that there isn’t a credit-worthiness or income requirement. However, you can go into default if the borrower fails to pay property taxes.”

According to a survey conducted by Ohio State University, of the 1,761 respondents, 68 percent obtained and retained a reverse mortgage. Of the respondents who took out a reverse mortgage, 83 percent were either “satisfied” or “very satisfied” with their decision. The top intended uses for respondents’ reverse mortgage are supplementing income (42 percent), paying off other mortgage debt (39 percent) and paying for home improvements (24 percent).

American Consumer Credit Counseling explains the pros and cons of a reverse mortgage (


  1. Get cash or pay off debt and make no payments: No monthly payments are due for as long as the homeowner lives in the home. The mortgage pays off existing mortgages on the home. The borrower’s credit score and income are not considered and proceeds are not taxable.
  2. Offers security: A reverse mortgage allows the homeowner to stay in the home permanently, and with minimal requirements. The extra money may help the borrower maintain their independence and security.
  3. Keep control: The borrower can control how much or how little they take out of their equity and flexible terms for receiving payments are available. They may also decide how much equity they leave to their heirs. The heirs may inherit the home and keep the remaining equity after the balance of the reverse mortgage is paid off.
  4. Fair and safe way to access equity: Reverse mortgages are government designed, highly regulated and an extensively disclosed mortgage program. The loan can’t get “upside down,” so the heirs will never owe more than the home is worth. The interest rate is generally lower than traditional mortgages and home equity loans, and the lender is repaid on what is owed.


  1. Loan balance can increase over time.
  2. Fees are most likely higher than a regular mortgage.
  3. There are fewer assets to leave to heirs. The house can be left but the heirs must pay the loan’s balance.
  4. It could go into default or foreclosure if the borrower fails to pay property taxes, doesn’t continue home insurance or fails to maintain the home.
  5. The loan is due if the borrower moves out of the house for any reason.


ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling, call 866-826-6924
  • For housing counseling, call 866-826-7180
  • Or visit us online at

About American Consumer Credit Counseling

American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to or visit