Are there restrictions on how I use the income from a Reverse Mortgage?

Other than having to pay off any existing liens on your property (a prior mortgage, home equity loan, tax lien, etc.), there are virtually no restrictions on how a reverse mortgage may be used. A few of the more common uses we’ve encountered include; cash for daily living, pay for medical expense, consolidate debts and improve cash flow, purchasing a new home, and wealth management.

One of the more creative uses of a reverse mortgage was to improve a parents relationship with their children. The parents decided to give the kids a one time gift of the proceeds from the reverse mortgage to the kids so the kids could pay off their own mortgages and stop the ongoing requests for handouts. They saw it as a means to distribute part of the estate early.

Another unique solution, was to obtain sufficient funds for a senior to make her home live able and payoff her mortgage so she could live in the home. She had lived 2 years in a home that was partially collapsed. Now she lives in a nice home and has some monthly income to cover the cost of her pets.