This Louisiana woman refuses to pay a share of her 80-year-old mom’s reverse mortgage costs — says it’s ‘throwing money away.’ Now, her family resents her. Here’s the Ramsey Show’s response

“[My step-father] passed away, left her nothing, and their house is reverse mortgage, which is the worst,” she said on a recent episode of The Ramsey Show. “I deliberated with my husband and he's like, ‘Kari, it's a reverse mortgage, why would we throw money into it when your mom has options?’”

Struggling with debt of their own and the costs of raising two children, the couple now faces an uncomfortable choice between keeping a roof over her mother’s head or their own financial stability. Unfortunately, many middle-aged Americans find themselves in similar situations.

Sandwich generation

As of 2021, 23% of Americans could be considered part of the “sandwich generation” — those supporting both parents above the age of 65 and children below the age of 18, according to Pew Research Center.

Like Kari, this generation faces financial pressures from both sides as the costs of raising kids and senior living escalate. However, the family faces additional pressure from her mother’s reverse mortgage.

A reverse mortgage lets homeowners above the age of 62 borrow money from their equity. Unlike a home equity loan, there are no monthly payments to the loan itself. The loan is repaid when the homeowner moves out, sells the home, or passes away, typically using proceeds from the home's sale.

This financial tool is waning in popularity. In fiscal year 2024, only 26,521 homeowners initiated a reverse mortgage, compared to 64,489 in 2022 and 32,991 in 2023, according to the National Reverse Mortgage Lenders Association.

Reverse mortgages can be a relatively expensive form of debt, since they involve additional costs such as origination fees, real estate closing fees and mortgage insurance premiums, according to the Consumer Financial Protection Bureau. With high interest rates in recent years, this tool has become even less attractive.

Kari says her mother’s home is in disrepair and facing foreclosure if she vacates.

“If she leaves the house she's gonna have to just leave the house and let them get it back,” she said. This is why she considers any financial contribution to be a waste of money.