7 Things Even the Smartest Advisors Often Miss About Reverse Mortgages

You’ve earned your place as a trusted advisor. You know retirement planning inside and out; income strategies, Roth conversions, RMD strategies, sequence of return risk, the challenges with in-home care. But when it comes to accessing home equity, or using tools like reverse mortgages, even the most experienced professionals are overlooking key insights that could transform their clients’ outcomes.

We’ve had conversations with thousands of financial advisors, attorneys, tax professionals, and fiduciaries, and we keep hearing the same things: “I didn’t know that,” “No one ever explained it this way,” or “I wish I had understood this sooner.”
These gaps in knowledge aren’t due to a lack of intelligence. They’re due to decades of misinformation, outdated assumptions, and an industry that has failed to keep up with the modern planning environment.

Let’s narrow that gap. Here are 7 things you might not know (but should), specifically about reverse mortgages, or more accurately, home equity conversion mortgages:

1. They’re Not Just for the Desperate or Cash-Strapped

Modern reverse mortgages are being used by affluent retirees to optimize tax strategies, delay portfolio drawdowns, and increase financial flexibility; not just to cover monthly expenses. One of the most valuable uses is creating a reserve for in-home care or aging-in-place support, one of the most significant and unpredictable risks in retirement.

2. Line of Credit Growth Is a Hidden Gem

Unused reverse mortgage lines of credit grow over time, independently of home values. In today’s market, that creates a powerful, compounding financial reserve while mitigating the risk of a downturn in real estate. Many families use this as a future-proof way to fund unexpected costs, like healthcare or assistance at home. If you don’t yet understand how this growth feature works, this is your starting point to fully grasping the role that equity can play in your retirement plan. 

3. They Help Protect Against Market Volatility

Tapping a revolving home equity line during down markets instead of selling off investments can dramatically improve long-term retirement outcomes. This strategy helps mitigate sequence of return risk, providing a buffer during downturns and offering peace of mind when markets become unpredictable. It also creates flexibility to address rising care needs without impacting the rest of the plan.

4. Borrowers Can Never Owe More Than the Home’s Value

Thanks to FHA insurance on HECMs, reverse mortgages are non-recourse loans. This means heirs are protected, and planning certainty increases.

5. You Can Use Them to Refinance an Existing Mortgage

Replacing a required mortgage payment with a reverse mortgage can free up thousands per month in cash flow, even if the client doesn’t need the money right away. That freed-up cash can be redirected toward a variety of uses: funding in-home care, supplementing discretionary spending, bolstering emergency reserves, continuing payments on the loan while freeing up future access, or supporting other planning goals.

Most notably, it can reduce reliance on investment withdrawals, helping clients preserve their portfolios and maintain more sustainable long-term strategies.  And as markets shift, you retain the ability to make payments on the loan if you choose to do so. 

6. They Can Work Beautifully with Long-Term Care and Life Insurance

Housing wealth can support premiums for LTC or life insurance. Or, it can supplement care costs later in life without disturbing investment portfolios. And that’s no small matter: covering care costs is one of the greatest financial risks most families face in retirement, yet one of the areas they are least prepared for.

7. Delaying Is Often the Most Costly Mistake

Waiting “until it’s needed” misses years of compounding line-of-credit growth and planning advantages. Earlier planning usually means greater impact, increased access to liquidity, and a future that blends both certainty and flexibility. 

Ready to Learn More?

There’s a reason advisors and those with a fiduciary mindset are adding housing wealth into their planning framework. The math and benefits have been proven, now it comes down to willingness to learn and understand.  If you're serious about helping clients retire smarter, reverse mortgages deserve your attention.

Check out one of our upcoming webinars, connect directly with our team, or simply join our distribution list to become informed of how we are working with other financial professionals.