Reverse Mortgage Warning Signs and Red Flags
Published July 5, 2026 · Reviewed by Calvin
Walk away if you hear
- “You cannot lose your home” (misleading; default on taxes/insurance can lead to foreclosure)
- “Free money from the government”
- “Sign today or lose eligibility”
- “Use the cash to buy this annuity/investment”
- Door-to-door or unsolicited mail targeting recent widows
Safer approach
- Take written disclosures home
- Complete counseling before deciding
- Compare at least two lenders
- Involve a trusted family member or advisor
When this is NOT a good fit
- You cannot reliably pay property taxes, homeowners insurance, and maintenance
- You plan to move within a few years
- You need every dollar of home equity preserved for heirs
- Medicaid or SSI eligibility depends on keeping assets below program limits (consult an elder law attorney)
- You were pressured by a salesperson without time to research alternatives