What Can I Use a Reverse Mortgage For?

Borrowers can use the funds from a reverse mortgage for any purpose. Many older Americans use a reverse mortgage to increase monthly cash flow and improve financial security in their retirement years. Money from a reverse mortgage can be used to help pay for medical expenses, bills, outstanding debts, home improvements, and general living expenses.

Some borrowers use a reverse mortgage to pay for the purchase of a new (and smaller) home or condominium. The government’s Home Equity Conversion Mortgage (HECM) program allows borrowers who qualify for a reverse mortgage to use it as a purchase mortgage instead. The purchase mortgage then allows homeowners to downsize into a smaller, more affordable home.