Managing debt in retirement can feel overwhelming—especially when monthly payments barely reduce the balance and continue to chip away at a limited income. Whether you’re handling credit card balances, medical bills, or auto loans, a reverse mortgage could be the solution that helps you regain control and breathe a little easier.
While a reverse mortgage is still a loan, it offers a very different structure than traditional debt. Because repayment isn’t required until much later, it provides flexibility that may be especially useful for retirees trying to stretch their budgets.
Let’s break down how this option works, when it makes sense to use it for debt, and what tradeoffs to consider before moving forward.
Understanding the Reverse Mortgage Structure
Before diving into debt relief, it’s important to understand how a reverse mortgage actually works. This type of loan allows homeowners—typically age 62 or older—to borrow against the equity in their home without needing to make monthly payments. Instead, repayment happens later, when a qualifying event occurs. These events could include the homeowner moving out, selling the property, or passing away.
Read More How to Use a Reverse Mortgage to Take Control of Debt
