A reverse mortgage isn’t right for everyone, but it can be a good financial tool in the following situations: If you don't plan to move: Since a change of permanent residency triggers the reverse mortgage repayment obligations, this type of loan is generally only a good idea if you plan to age in place. If you’re on a fixed income: Many seniors who depend on a fixed income from Social Security or other retirement programs use reverse mortgages to supplement their income. People often get reverse mortgages to pay off their existing mortgages and use the savings for extra cash every month. If you can afford to keep up with ongoing costs: Reverse mortgages require you to pay expenses associated with property taxes, insurance and maintaining the residence. You must also pay a servicing fee to the lender, which is typically due monthly. Otherwise, you’re at risk for default and foreclosure. If you expect your home value to increase: If your heirs sell your house after you die to pay off the loan, they can keep the surplus of the sale. This means that, should your property value increase, it may offset a major downside of reverse mortgages.