Mandatory debt payments reduce retirement income and possibly savings – does it make sense to continue them in later years? There may be a better way.

George A. Downey, February 15, 2023

The answer, of course, depends on one’s circumstances. For the few that have sufficient income and savings it may not be a significant problem. For the majority, however, it is a major concern especially when transitioning from higher income working years to reduced income retirement years.

Debt won’t go away – consider the options.

The obvious problem with debt – it must be repaid or suffer the consequences. The question is how? The traditional way of making payments is to draw from income and/or from savings, but that reduces cash flow for living expenses and potentially depletes savings needed later for planned or unexpected expenditures.

Home equity may provide a solution.

Thanks to the extraordinary increases in home prices in recent years, home equity is clearly the largest single asset most have. In fact, senior homeowners have amassed 11.7 trillion in home equity according to the S&P Case-Shiller Index. Huge numbers indeed, but it’s illiquid and can’t be used unless the owner(s) sell, or borrow against it.

For those that don’t want to sell, or take on unwanted mortgage payments, a better solution may be a reverse mortgage that was designed specifically to meet the more limited resources and changing needs of aging homeowners.

Reverse Mortgage Overview

  • No monthly payment obligations – voluntary payments are permitted but not required. Monthly charges are deferred until the home is eventually sold.
  • Withdrawal options – credit line, periodic payments, lifetime income, or cash as needed,
  • Credit line growth – the undrawn balance of the credit line grows (compounding monthly) at the same rate charged on funds borrowed providing more funds in the future.
  • No maturity date – repayment not required until no borrower resides in the property.
  • Non-Recourse loan – neither borrowers or their heirs incur personal liability.  Repayment of loan balance can never exceed the property value at the time of repayment.  If loan balance exceeds property value at time of repayment the lender and borrower(s) are protected by FHA insurance.
  • Access to funds and loan terms are guaranteed – cannot be frozen or cancelled as long as the loan remains in good standing.
  • Borrower obligations (to keep loan in good standing) are limited to:
    • Keeping real estate taxes, homeowner’s insurance, and property charges current
    • Providing basic home maintenance
    • Continue living in the property as primary residence.

Good for some – not for all

Reverse mortgages are unique. They were designed to meet the varying needs of older homeowners that want to age-in-place. The terms, benefits and operation are different from traditional (forward) mortgages.

Education is key to understanding if one may be a suitable solution. The recommendation is to confer with knowledgeable and experienced professionals to determine the best course of action for your situation.


Get the facts and determine if, or how, the various options to utilize housing wealth may enhance your individual needs and circumstances. For more information, visit the National Reverse Mortgage Lenders Association (NRMLA) website, or feel free to contact the author for a private consultation.

George Downey, Certified Reverse Mortgage Professional, (NMLS 10239), is the CEO and founder of Harbor Mortgage Solutions, Inc., Braintree, MA, a mortgage broker licensed in Massachusetts (MB 2846) and Rhode Island (20041821LB), NMLS #2846.  Questions and comments are welcome.  Mr. Downey can be reached at (781) 843-5553, or email: