Yahoo Finance
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.
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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New data (1) 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.
According to the Federal Trade Commission (2), 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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