5 Questions Every Adult Child Should Ask About a Reverse Mortgage

If you’re an adult child researching reverse mortgages for your aging parent, you probably have a lot of questions. Some of those questions come from genuine concern. Others come from things you’ve heard — maybe from friends, maybe from the internet, maybe from a financial advisor who isn’t sure how reverse mortgages work.

Here are the five most important questions to ask — and why they matter.

1. Can My Parent Lose the House?

This is the question I hear most often, and it’s the one with the clearest answer: no, as long as the loan obligations are met. Your parent retains the title to the home. They can live there for as long as they want, as long as they continue paying property taxes, maintaining insurance, and keeping the home as their primary residence.

The reverse mortgage does not give the lender any ownership stake in the home. It’s a lien — just like a traditional mortgage. The difference is in how repayment works: instead of monthly payments, the loan is repaid when the home is eventually sold.

2. What Happens to the Home When My Parent Dies?

When the last borrower passes away, the loan becomes due. Your family has options: sell the home and keep any remaining equity, pay off the loan and keep the home, or negotiate with the servicer. HUD gives heirs up to 6 months to resolve the loan — and extensions are often available.

The critical point: the non-recourse protection means your family will never owe more than the home is worth. If the loan balance exceeds the home’s value, the FHA insurance covers the difference.

3. Will This Affect My Parent’s Government Benefits?

A reverse mortgage does not affect Social Security or Medicare. However, it can affect need-based programs like Medicaid and Supplemental Security Income (SSI). If loan proceeds aren’t spent in the month they’re received, they may be counted as assets.

This is one of the most important reasons to work with a qualified professional and consult with your parent’s financial advisor before proceeding.

4. How Much Does It Cost?

The main costs include an upfront Mortgage Insurance Premium (2% of the home’s value), an origination fee (capped at $6,000 by HUD), closing costs, and annual servicing fees. These are typically financed into the loan — meaning your parent pays nothing out of pocket at closing.

The key question isn’t just “what does it cost?” but “what does it cost relative to the benefits?” For many families, eliminating a monthly mortgage payment and accessing equity for care planning far outweighs the costs.

5. Is This the Right Choice for My Family?

A reverse mortgage isn’t the right answer for every family. It’s a tool — and like any tool, it works best when it’s part of a plan. The best way to answer this question is to:

• Talk to a qualified loan officer who can run the numbers for your specific situation
• Consult with your parent’s financial advisor or CPA
• Complete HUD-approved counseling (required for all HECM loans)
• Discuss the decision as a family — with clear communication about expectations and obligations