Reverse mortgage – the home pension plan

November 14, 2023

In Europe, the term for reverse mortgages is the home pension plan.

It really is a way to plan and handle your finances in retirement. There is no limit on how you can use the funds from a reverse mortgage.

One great strategy to boost your income would be to use the funds from a reverse mortgage to purchase an investment property.

Another way to structure the funds is to set up a line of credit to have disbursements every month to enhance your lifestyle.

And yet another way would be to take a lump sum at closing and make renovations or add on to your home. You will have the funds ready to pay the contractor and not have to deal with draws on a construction loan. Your home gets a huge boost in value and continues to appreciate.

A reverse mortgage loan is for seniors over the age of 62 who have enough equity in their home and want to access it. The Home Equity Conversion Mortgage is insured by the U.S. federal government and is only available through an FHA lender. The beneficiary of the property will be given a certain amount of time to either sell or refinance the home. If the heirs do not want to acquire the property, they are not required to pay off the debt. They simply advise the lender that they will not be keeping the home.

There are many ways to use the funds from a reverse mortgage. The one thing that is especially helpful to seniors is that there is no principal and interest payment due each month. This frees up more of their monthly income to enjoy daily life.

JoAnn Moore is a licensed mortgage originator, NMLS #165477, for The Mortgage Market of Delaware LLC, Georgetown. For more information, call 302-236-1229 or email

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