Jun 14, 2026
Imagine this scenario: Your parents are both in their 60s, carrying debt and trying to stay on top of bills while everyday costs keep rising. Then your dad suffers a heart attack.
Suddenly, medical bills, lost income and the financial squeeze have the family searching for solutions. One option seems to come up on top: a reverse mortgage.
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For many older homeowners, tapping into the equity they’ve built up over decades can seem like a lifeline.
New data from nonprofit financial counseling organization GreenPath Financial Wellness found that 21.1% of seniors seeking reverse mortgages in 2025 were already running monthly budget deficits, up from 12.2% a year earlier.
If your parents are considering a reverse mortgage to cover costs after a health crisis, while it could be a good move, it may not be the only option available.
A reverse mortgage can help — but it isn’t free money
According to the Federal Trade Commission, a reverse mortgage allows homeowners aged 62 and older to borrow against the equity they’ve built up in their home.
Unlike a traditional mortgage, borrowers generally don’t make monthly loan payments. Instead, interest and fees are added to the loan balance over time, and the loan typically becomes due when the homeowner dies, sells the home or permanently moves out. The funds can be received as a lump sum, monthly payments or a line of credit and may be used for expenses such as debt repayment, healthcare costs or supplementing retirement income.
For families dealing with a sudden health crisis, such as a heart attack or other serious illness, that extra cash flow can be very appealing.
But a reverse mortgage doesn’t magically get rid of all housing costs.
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Homeowners still have to pay property taxes, homeowners insurance, maintenance expenses and other housing-related costs.
The GreenPath data could suggest that many seniors are opting for reverse mortgages because they have run out of other options. The findings paint a picture of retirees struggling with rising housing costs, healthcare expenses and everyday bills, even while sitting on substantial home equity.
So while the loan might help with an immediate cash-flow problem, it doesn’t necessarily fix an underlying budget shortfall.
There’s also the long-term impact to think about. Reverse mortgages reduce the amount of home equity available in the future and can leave less wealth to pass on to any heirs, according to the Consumer Financial Protection Bureau.
If you’re considering a reverse mortgage, it’s important to think about whether it addresses the root problem or simply buys more time.
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Alternatives to consider instead of a reverse mortgage
Before signing up for a reverse mortgage, it may be worth considering a few other ways to ease the financial squeeze.
Downsize the family home.
Many retirees are still living in houses that made sense when the kids were growing up, but now come with hefty property taxes, utility bills and maintenance costs. Moving to a smaller home could unlock equity while cutting monthly expenses at the same time.
Tap equity another way.
Depending on their financial situation, the parents in a situation like this one may be able to access home equity through an option such as a home equity line of credit. Options such as this generally come with monthly payments, so the costs should be reviewed over the long run.
Get help tackling debt.
If credit cards or other debts are the main problem, a credit counselor may be able to help negotiate with creditors, lower payments or create a realistic plan to get finances back on track.
Check for overlooked benefits.
According to the National Council on Aging, many older Americans could be missing out on government programs that help cover healthcare costs, prescription drugs, utility bills and other essentials. It’s worth reviewing your benefits which could uncover savings that ease the pressure on their budget.
Look into disability assistance
In this situation, if a parent’s heart attack affects their ability to work, they may qualify for disability benefits through Social Security or other forms of financial support that could help replace lost income.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
The bottom line
While a reverse mortgage could provide much-needed cash, it’s important not to think of it as a cure-all. For retirees who are determined to stay in their homes, it can be a valuable tool. But for many older homeowners who may be struggling with debt, rising healthcare bills and soaring living costs, it could be masking a deeper financial problem.
Before signing on the dotted line, it’s worth taking a close look at other options. A conversation with a financial professional could help find a solution to an immediate cash flow problem, but protect a longer-term financial future, as well.
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Freelance writer with an economic development and consulting background.
