What are the alternatives to a reverse mortgage?

Why look at alternatives first?

You've spent 30 or 40 years building equity, and the decision about how to use it deserves the same care. A reverse mortgage is a great fit for some homeowners and the wrong one for others. The right answer depends on three questions: Do you want to stay in this home? Can you handle a monthly payment? And how much do you want to leave to your family?

What are my options?

Option	Stay in your home?	New monthly payment?	Best for	Watch out for
Trim the budget and check benefits	Yes	No	A small monthly gap	Many retirees miss benefits they qualify for
Property tax deferral	Yes	No	Property taxes are the squeeze	Interest adds up; limits and deadlines apply
Sell and downsize	No	Depends	You're ready for a smaller or easier home	Selling and moving costs, and leaving your neighborhood
Reverse mortgage for purchase	New home	No	Downsizing without a new mortgage payment	Needs a large down payment
HELOC	Yes	Yes	Flexible cash, and a payment you can handle	Variable rate; payment rises after the draw period
Home equity loan	Yes	Yes	A fixed lump sum with a fixed payment	Adds a second payment
Cash-out refinance	Yes	Yes	Replacing a higher-rate mortgage	Resets your first mortgage, maybe at a higher rate
HomeSafe Second (reverse mortgage second)	Yes	No	Keeping a low first mortgage, 55+ (62 in Texas)	Balance grows over time
Home equity investment	Yes	No	Cash without a loan payment	You give up a share of future value; can be costly
Rent out a room or an ADU	Yes	No	A spare room or backyard space	Being a landlord; local rules
Help from family	Yes	Maybe	Short-term needs	Put it in writing to protect relationships
Sale-leaseback	As a renter	Rent	Rarely the best choice	You give up ownership; read every term
Reverse mortgage (HECM)	Yes	No	Staying put long term with no mortgage payment	Balance grows; costs up front

Thinking about selling? In California, our affiliated real estate brokerage, The Home Advisory (DRE #02020987), can help you sell and buy while we handle the financing. You're free to choose any agent; see the disclosure below.

Which one fits me?

• "I want to stay, and I can't take on another payment." Property tax deferral, a HECM, or HomeSafe Second.
• "I want to stay, and a payment is fine." A HELOC, a home equity loan, or a cash-out refinance, especially if you're under 62.
• "This house is too big now." Selling and downsizing, or a reverse mortgage for purchase so the new home has no mortgage payment.
• "Leaving the house free and clear to my kids comes first." Budget changes, benefits, family help, or a loan you pay down. See when a reverse mortgage is a bad idea.
• "I'm carrying high-interest debt." Start with your Life Rate, the blended rate on everything you owe.

What should I avoid?

• Anyone who pushes one option without showing you the others
• Using home equity to buy an annuity or investment someone is selling you
• Sale-leasebacks and "cash for your home" offers you haven't had an attorney review
• Deciding alone. Bring your family and your financial professional to the table.

Example scenario (illustrative)

A 71-year-old widow in Sacramento has a paid-off home worth $600,000 and $1,900 a month in Social Security. Her property taxes and insurance are the squeeze. We look at everything together: California's property tax postponement program would cover her taxes, but not the new roof she needs. A HELOC payment wouldn't fit her budget. A HECM line of credit covers the roof, leaves a cushion for emergencies, and lets her stay in the home she loves. It's the right fit for her, but only because we checked the alternatives first.

Our take

I've been doing this for more than 25 years, and the best decisions I've seen come from families who looked at every option before choosing one. That's why I'll walk you through all of these, including the ones we don't offer. If a reverse mortgage isn't your best move, I'll tell you.