Is a Reverse Mortgage Right for You?

Posted on April 4, 2014 by bermanstaff

Reverse mortgages are now a popular option for many senior homeowners. Lower income due to retirement, increased medical costs, and unexpected expenses can all make utilizing the equity stored in your home and attractive option. While tapping into these saving can provide many homeowners with the extra amount they were missing, for others it may be a costly decision. Whether or not a reverse mortgage is the right option for you will depend on your personal circumstances and goals.

What is a reverse mortgage?
A reverse mortgage is similar to a regular mortgage in that it allows homeowners to utilize the equity in their home. Reverse mortgages differ in that instead of requiring the homeowner to immediately begin servicing the loan, payment does not begin as long as the homeowner lives in the home. The loan is satisfied later on when either the home is sold, the home is no longer the homeowner’s primary residence, or upon death.

To qualify for a reverse mortgage, the youngest homeowner must be at least 62 years of age and have considerable equity in their home. Generally, there are no minimum credit score requirements or income requirements.

Potential Benefits of a Reverse Mortgage
Under the right circumstances, a reverse mortgage can offer a number of benefits to homeowners. One of the primary benefits is that the homeowner can stay in his or her home. It also allows homeowners to maintain title on the deed. Additionally, they can live mortgage payment free, as long they meet eligibility requirements for home maintenance, and pay property taxes and insurance. Furthermore, the loan proceeds are not taxable, and the interest rate may be lower than traditional mortgages and home equity loans.

Depending on the needs of the individual seeking a reverse mortgage, payments from the lender can be made as a credit line for emergencies, on a monthly basis, or as a lump sum distribution.
The money can then be used to cover home maintenance, personal medical costs, or any other financial obligation. This additional income could help eliminate major financial concerns for seniors.

Possible Downsides of a Reverse Mortgage
It is easy to be swept away by the promise of additional income during tight financial times, however the decision to take out a reverse mortgage should be made cautiously. Reverse mortgages are typically recommended for individuals who plan to borrow a large sum against their home, and continue living there for an extended period of time. This is because lenders generally charge an origination fee, a mortgage insurance premium, and other closing costs for a reverse mortgage, that may not make financial sense for smaller amounts. Lenders also may charge servicing fees during the term of the mortgage.

Recipients of Medicaid and other need-based government assistance should also be cautious. The government assistance they receive may be affected if too much funds are withdrawn in one month and not spent. However typically, Social Security and Medicare benefits are not affected by a reverse mortgage.

Homeowners who plan to leave an inheritance for their loved ones should also be aware of the effects a reverse mortgage will have on their home. Most reverse mortgages include a nonrecourse clause that prevents the estate from owning more than the value of the home when the loan is due. This means that the loan liability does not pass on to heirs. Heirs can still inherit the home and equity left after the reverse mortgage has been payed off, however it they wanted to retain ownership of the home, they would be required to repay the loan in full, regardless of the value of the home.

When considering a reverse mortgage loan, beware of scams. Due to the complex nature of reverse mortgage loans, it is easy to be taken advantage of. Be diligent in your research and do not respond to unsolicited offers. Consider speaking to a trusted financial specialist who can help you find a reputable lender.

Reverse mortgages can offer an appealing solution for dealing with extra expenses incurred in the later years of life. At the same time, it requires a thorough understanding of personal financial plans and circumstances to make a best fit decision. As with all significant financial transactions, it is beneficial to discuss your options with an independent financial consultant to ensure that you fully understand the options that are available to you. Through careful research and consideration, you can find the solution that helps you or your loved one enjoy the golden years of life.


The content of this blog is intended for informational purposes only. It is not intended to provide legal advice. You should not take, or refrain from taking, any legal action based upon the information contained on this blog without first seeking professional counsel.

About Berman & Riedel, LLP firm managing partner attorney William M. Berman:

Attorney William M. Berman focuses his practice in the areas of catastrophic personal injury, wrongful death and elder abuse and neglect. Strictly a plaintiffs’ dedicated firm, he never represents insurance companies in the defense of claims. Mr. Berman’s firm remains staunchly committed to helping those who have suffered serious injury or loss due the negligence, intentional misconduct or wrongful acts of others. Mr. Berman has grown his firm to what is considered one of the largest and most successful elder abuse/neglect practices within California. Through his continued successes in handling claims involving nursing home and elder abuse and neglect, Mr. Berman remains a prominent figure in advocating on behalf of this vulnerable class of citizens.
View full biography

5 Star Rated Injury Lawyers In California

Bringing our injured clients unparalleled success
Settlement Won
Serious Personal Injury
Settlement Won
Mild Traumatic Brain Injury
Trial verdict
Automobile Accident
Settlement Won
Elder Neglect
Settlement Won
Elder Neglect
Settlement Won
Elder Neglect


Speak Directly With A Partner Now.

  • NOTE: All Fields Required

  • Hidden
  • This field is for validation purposes and should be left unchanged.
Real Injuries. Real Testimonials

Watch What Our Clients Have To Say

Elder Neglect by Healthcare Corporation
Jean’s mother was a victim of neglect while at a skilled nursing facility, resulting in surgery that she did not survive. Berman was there to listen and provide support that the client needed.
Wrongful Death at a California Nursing Home
Michele’s mother suffered a wrongful death at a California nursing home. William M. Berman and the attorneys at Berman & Riedel, LLP helped litigate the case with successful results.
Wrongful Death Legal Services
Ginny suffered a family loss, and Berman lawyers handled her legal needs with compassion and reassurance, allowing her to feel safe and at-ease through the entire process.
Serious Injury at Skilled Nursing Facility
Ira’s wife suffered a traumatic brain injury due to negligence at a skilled nursing facility, and our team of attorneys worked hard to ensure that Ira’s wife and his family received the compensation that they rightfully deserved.
See more client testimonials
Blog, Insights & News

In The News

June 15, 2023

Nursing Home Elopement – Dementia Wandering Behavior & Nursing Home Negligence

Elopement is one of many risks to older adults with dementia. Even in the early stages of dementia, wandering behavior can be dangerous as seniors […] Read More
February 15, 2023

Medication Errors in Nursing Homes – A Common and Dangerous Form of Nursing Home Negligence

Most nursing home residents rely on a careful treatment regimen and medication to maintain their health and quality of life. When nursing homes, physicians, nurses, […] Read More
January 15, 2023

Can You Get a Concussion Without Hitting Your Head? – Dispelling Common Concussion Myths

A concussion is a type of brain injury that’s common in all types of accidents, from car accidents to falls. Unfortunately, many concussions are not […] Read More

Frequently Asked Questions

Below are answers to common questions people have about personal injury cases and working with a lawyer. During your initial consultation, we will be happy to answer questions that are particular to your case.

How Much Does It Cost to Hire a Personal Injury Attorney?

The attorneys at Berman & Riedel, LLP, accept cases on a contingency-fee basis. This type of agreement means you do not pay any attorneys’ fees out-of-pocket for legal representation. Attorneys’ fees are also contingent on the outcome of your case.

You benefit from legal representation in exchange for an agreed-upon percentage of a settlement or jury award. We will only recover a fee if you recover compensation.

Can You Tell Me How Much My Case Is Worth?

There is no way to determine the exact value of a personal injury case, especially early in your case. However, an experienced attorney can give you an estimated range based on their experience with similar cases.

There are many factors that may influence the value of your case, such as:

  • Your total financial or economic damages
  • The severity of your injuries
  • The impact of your injuries on your daily life
  • The strength of your case
  • Whether you share fault for your accident
  • Insurance policy limits 

Some damages are easy to calculate, such as lost wages and medical bills. Calculating the value of diminished earnings for the rest of your life or future medical needs; however, may require the help of experts. Non-economic damages like pain and suffering have no intrinsic financial value. These damages are challenging to calculate. 

If your case goes before a jury, you may potentially be able to recover more than you could through a settlement. However, this introduces a new element of risk: the jury. The circumstances of your accident and even how sympathetic you or the defendant are can influence the outcome.

During your consultation, and throughout your case, we will help you understand how these factors influence your case. We will also work tirelessly to document the value of all your damages and pursue maximum compensation on your behalf.

Will My Case Go to Trial?

The vast majority of cases are resolved by reaching a settlement agreement outside of court. Very few personal injury cases actually go to trial, but it is more likely if the facts in your case are in dispute, a legal issue is being contested, or you have a high-value case.

An experienced lawyer will build your case as if it will go to trial from the beginning. The stronger your case and evidence, the more likely a fair settlement will be reached.

How Do I Know If I Need a Personal Injury Lawyer?

If your case involves mostly property damage or minor injuries, you likely do not need a lawyer to handle a claim with the insurance company. The more serious your injuries, or the more complex your case, the more important it becomes to seek experienced legal counsel.

Remember that the insurance company is not on your side, even if the insurance adjuster seems sympathetic and you receive a settlement offer. If you are being blamed for your accident or sustained serious injury, a lawyer will help you protect your rights and build the strongest case possible. This includes calculating the full value of your current and future losses.

Legal representation is also vital if your case involves a complex area of law such as elder abuse or neglect, premises liability, commercial vehicle accidents, medical malpractice, or serious work-related accidents. Determining liability, navigating decades of legal precedence, and interpreting specific statutes in these cases is best done with years of relevant legal experience.

Do You Accept Cases Outside of San Diego?

While our law office is located in San Diego, Berman & Riedel, LLP, accepts cases throughout the state of California.


Speak Directly With A Partner Now.

  • NOTE: All Fields Required

  • Hidden
  • This field is for validation purposes and should be left unchanged.
Call Us
Free Consultation
To Top