Is a reverse mortgage right for you?

A reverse mortgage is a home loan that you do not need to pay back until you move from your home, no matter how far in the future that may be. You may use the proceeds from the loan for anything you choose, such as daily living expenses, home improvements, paying off debts or traveling. The amount you can borrow from a reverse mortgage depends on several factors, including the value of your home, the equity you have in it, the type of reverse mortgage you choose and the interest rate.

To be eligible for a reverse mortgage you must be at least 62 years old, own the home, and the home must be your primary residence. You can get a reverse mortgage through most regular mortgage companies, and you can choose to receive the loan payment in a lump sum, as monthly payments or as a line of credit. You or your estate must repay the loan, accumulated interest, closing costs and service fees in full when you move from your home, leave your home for 12 consecutive months due to illness, sell your home or pass away.

While reverse mortgages may be a convenient way to ease financial pressure and provide some financial freedom, they are not suitable for everyone and the details must be considered carefully.

Keesha Allen, homeownership counselor with the Home Repair Resource Center in Cleveland Heights (216-381-6100, ext. 13), counsels local residents on the pros and cons of reverse mortgages. “Reverse mortgages are right for some people, but not for everyone. We help people understand the details and the fine print,” said Allen. Allen meets with local homeowners, discusses their financial situation with them, and helps them determine if a reverse mortgage would be beneficial for them. If not, she is able to suggest other solutions to help with financial problems the homeowner may be facing.

Potential drawbacks to reverse mortgages can include fees and closing costs, mortgage insurance payments, tax consequences and a large lump sum to repay when the loan comes due. It may also affect Supplemental Security Income, Medicaid and other public assistance benefits you may be receiving.

If the homeowner decides to pursue a reverse mortgage, Allen refers them to the reverse mortgage counselors at Neighborhood Housing Services of Greater Cleveland (NHS, 216-458-4663, ext. 2329). Federal law requires all homeowners to consult with a counselor from a government-approved housing counseling agency, such as NHS, before applying for a reverse mortgage. An NHS counselor will provide you with information about the types of reverse mortgage products, how they may benefit your situation, and guide you through the decision-making process.

Judith Eugene

Judith Eugene is a native of Cleveland Heights who provides life-enrichment classes and activities for senior adults and those with physical and mental challenges through She may be reached at 216-408-5578 or

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Volume 8, Issue 3, Posted 10:46 AM, 02.27.2015