Most people agree that reverse mortgages may cost more than a normal equity loan.   Interest is added to the principal balance each month, and the amount of interest owed is compounded over time.  The interest will not be tax deductible until the loan is paid off, in part or in full.  Plus, since your reverse mortgage uses equity in the property, this constitutes a loss of assests that you might be passing on to your heirs.

On the plus side, most reverse mortgages are designed with no monthly payment as long as the owner(s) reside in the home.  There are no minimum income requirements.   You can use the money for any purpose.  Equity disbursed from this type of loan is tax-free.

Depending upon your plan, reverse mortgages will usually allow the owner to retain the title to the property until they have lived in a different residence for 12 months, sold the property, died, or you reach the end of the loan term.

Keep in mind that if your home increases in value during your loan period, less equity will be lost overall.

Here’s some advice, visit the HUD page on this subject and consult AARP and the National Center for Home Equity Conversion.